A Career in Risk Management. What Does a Risk Manager Actually Do?

Day to day, what is it that you do? Okay, well, so...

That is a really broad question.

So I've always been a generalist from a compliance perspective.

And now I would actually, I wouldn't say compliance, I would say non-financial risk because I do compliance risk and I look at operational risk as well.

Would it be useful, Ed, just to explain what non-financial risk versus financial risk is? It's obvious to some, but not to all.

Yeah, okay.

So financial risk is essentially the prudential capital management of an organisation.

So it's making sure that you've got capital and liquidity and funding in your organization.

It's about making credit and market risk decisions.

So, you know, should we lend this money? What is our capital allowance? If we do this activity, are we still going to have funding and liquidity to keep the organization afloat? And regulators impose capital adequacy levels and they say you have to hold this much cash in.

Non-financial risk is a very broad subsection, but it encompasses compliance and conduct.

So regulation, licensing, can you do this activity? How are you doing this activity? And then operational risk is the risk of people, processes, systems, activities, and external events going wrong.

and impacting your day-to-day operations.

Non-financial risk is just anything that's not to do with the money and the risk of doing a deal.

But all of the operational processes and all of your obligations outside of financial I've always been on the non-financial risk side of things.

I'm not particularly mathematical kind of a person.

I'm much more about the words and the interpretations and the should we kind of ethical questions.

So from my perspective, what does every day look like? In third-party risk, which is where I am now, I'm considering the risks and impacts of how our relationships with outsourced service providers, what that means for the organization and what are the operational processes that, you know, that might be at risk if we engage in a certain relationship.

So it really depends on the nature of the service provider.

What's the due diligence that we've done? What's the contracting position that we've got? What is the worst case scenarios of entering into that type of relationship? Do they have a good match for us from a environmental, social governance perspective, ethical perspective? So it really does vary.

I'm looking at incidents.

I'm looking at issues.

Every day is different.

And that's why I actually really love being in risk.

You don't really know what you're going to get from one day to the next.