Jobs in operational risk can be found in industries like banking, insurance, and information technology (IT), as well as in professions like lawyers, accountants, and programmers. The risk posed human error, system failure, and procedural failure is loosely defined as operational risk. Job opportunities in this field can be divided into two categories: operational risk prevention and risk analysis. Over time, operational risk has become more important, and businesses have devoted more resources to it, including hiring professionals and purchasing software to mitigate it.
The Basel ii Compliance Professionals Association defines operational risk as “the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events.” Fraud, vandalism, information theft, or worker’s compensation lawsuits could all result in losses. Accidental losses, such as those caused system failures, accounting errors, or product defects, may occur. Jobs in operational risk are evolving at the same rate as operational risk is being defined.
Careers in operational risk management are focused on either prevention or treatment. Operation risk analysts, operation risk examiners, and operation risk managers are among the former. These operational risk positions typically require a bachelor’s degree as well as knowledge of the industry’s regulatory laws and guidelines. Candidates who are successful are strong critical thinkers with the ability to work independently and influence others. They will be responsible for determining the impact of operational risk on the company’s financial goals and developing solutions to the complex problem that operational risk poses.
The latter operational risk jobs ensure that operational risk reduction plans are followed, that breaches are detected, and that the financial impact of these losses is minimized. Compliance and control officers keep an eye on the effectiveness of current risk management plans as well as their adherence to constantly changing regulations. Auditors check that reported data is correct on a regular basis, reducing operational risk detecting systematic errors and fraud. Because of its lower costs and error rate, operational risk control software has become a popular choice for businesses, and as this field grows, many IT operation risk careers are emerging. Companies are most interested in candidates who have a strong sense of ethics and have prior risk management experience.
Legal risk, which is the risk incurred when laws and regulations change, negatively affecting a company’s position, is another operational risk job. Recent events, such as the court decision in 2000 that forced the Equitable Life Insurance Society of the United Kingdom to close its doors, highlight the dangers of legal risk. Risk management counselors, lawyers with expertise in international law and Securities and Exchange Commission regulation, are sought large companies ranging from banks to medical institutions to assist in the development of risk management plans.