Finding a Career in Financial Risk Management

Written by
Rebecca Smith

Published
Oct 21, 2021

Oct 21, 2021 • by Rebecca Smith

Fraud is a global business through which hackers gain access to data that can harm businesses and individuals. There is an ongoing battle between hackers and cybersecurity professionals for control of such data. Recent ransomware hacks originating from Russia, China, and many other countries have crippled businesses all over the world. It takes a strong risk manager to prevent and recover from such attacks.

Hackers spend significant amounts of time searching for valuable data and even more time trying to hack into systems to obtain it. However, they can be slowed or even stopped with the right set of preventive measures.

One of the most important segments of risk management revolves around the financial industry. With nearly every financial institution offering online services, account maintenance, and transferring of funds, the opportunities are huge for hackers to steal money. Securing their networks is essential to protect businesses and customers from these threats.

There are many different types of financial fraud and that is why being a risk manager is such an important position. Working to protect businesses from various attacks through problem-solving and critical thinking keeps security professionals on their toes. Security Risk Management can be an exciting career in the tech field for those willing to implement systems and monitor them regularly. 

What is Financial Security Risk Management?

Security risk management is the process of identifying potential threats to security and implementing processes and procedures to mitigate or eliminate those risks. Depending on the size and type of company, risks will present themselves in different ways. It’s up to the risk manager and their team to assess the amount of risk that is involved in each instance.

In today’s fast-paced and high-stakes financial marketplace, keeping current with fraud and security can be challenging. Many Financial Risk Managers compare their positions to a cat and mouse game with new players emerging daily going after constantly growing targets. 

Risk Management in Banking

A job as a bank’s Information Security Manager requires constant monitoring of clients’ accounts. Larger institutions can have tens of thousands of accounts and many more daily transactions going in and out of those accounts. Tracking software can help with this process by identifying many of the common problems associated with banking fraud.

Some of the most common concerns of a bank security manager include:

  • Large incoming or outgoing transfers
  • Unusual activity in long-standing accounts
  • Invalid phone numbers
  • The use of multiple names or SSNs

Risk Management for eCommerce

Many online companies employ an eCommerce Financial Risk Manager, designated with the job of monitoring security, fraud, and compliance issues. Many payment processors require their merchants to monitoring account activity and can also offer software to help with the task. Protecting your companies finances along with your customers’ information is every merchant’s responsibility and can be a huge job depending on the size of the company. 

As an eCommerce Risk Manager, some of the most common red flags for fraud include:

  • Mismatched IP location and billing address (Geolocation)
  • Multiple inaccurate attempts to enter a credit card number
  • Multiple or repeated declined transactions
  • Expedited shipping to an address that is not the billing address

Some of these activities could be perfectly innocent, but they could also be major red flags that something bigger is at play. However, simply being aware of such instances is the first step in preventing them if necessary.

Risk Management for Payment Processors

While many of the risk management scenarios above in the e-commerce section will also apply with Payment Processor Risk Managers, there are some unique considerations. Payment Processing Risk Managers can have two main roles, working with existing merchants and helping underwriters review new merchants. These Financial Risk Managers need the ability to identify potential problems in current transactions or understanding potential merchant problems requires significant skills and training. 

Protecting a payment processing company from fraud will include monitoring both new and existing merchant accounts. If a payment processing company suddenly starts underwriting new merchant accounts for start-up businesses, they have many different concerns and issues to pay attention to. Likewise, existing merchants at a payment processor will need to be monitored to ensure that there are no issues with fraud or potential fraud. Risk managers need to check:

  • New merchant accounts that are being issued more rapidly than usual
  • Existing accounts showing higher transactions and chargebacks than usual
  • Unusual spikes in transaction attempts and/or sales
  • Numerous auto-generated notices going out to clients with overactive accounts

Unfortunately, a common source of fraud is from employees of payment processors. Payment processing companies have access to a large amount of valuable data, so it’s not unusual for hackers to look for jobs in these firms. Payment processor Risk Managers also have to stay vigilant when reviewing transactions as hackers will attempt fraudulent transactions through their networks in an attempt to scam merchants.

Once a hacker has been hired and learns how the company functions, they can commit a significant amount of fraud before anyone suspects them. Having a trained and experienced Risk Manager in fraud and security is so important in the payment processing industry.

Risk Management Requires Vigilance

Every day, a risk manager’s job is to patrol the proverbial streets of their security systems and their clients’ accounts, looking for suspicious activity. Here are some of the ways in which a risk manager operates like a detective:

  • Viewing daily transactions, looking for inconsistencies
  • Identifying potential problems and investigating the cause of those problems
  • Reporting known issues to merchants and customers
  • Finding and implementing solutions to protect those whose data is potentially vulnerable

The most exciting part of the job is often the investigation and solution implementation. Once you identify a problem, it’s up to you to find a way to solve it. Not only do you need to solve it, but you also need to add other layers to your cybersecurity to prevent it from happening again.

How Much is a Risk Manager Salary?

The distributions of salaries for risk managers have a large range. According to the most recent data from various job placement services, that range can be anywhere from $40K - $140K. This will depend on education, experience, certifications, and job requirements.

How to Become a Financial Risk Manager

To become a Financial Risk Manager, you’ll need to start with education. Not every company will require a degree, but if you have the resources to get one, it definitely can’t hurt. Aside from that, there are a variety of certifications that are important in this type of work.

  • Certified Information Systems Security Professional (CISSP)
  • Certified Information Security Manager (CISM)
  • Certified Ethical Hacker (CEH)
  • Certified Information Security Auditor

These are a few of the most highly respected certifications in the field. Most of them require you to purchase their study materials and conduct your own self-study prior to registering for an exam. The exams are typically proctored and timed.

Although it may seem overwhelming at first, these certifications will help you get and keep an exciting career as a risk manager. They may also help you make more money, depending on how your company evaluates talent and education. The more knowledge and education a Risk Manager can bring to the job, the more cyberattacks a manager can thwart.

Conclusion

Being a Financial Risk Manager is really just creative problem-solving. If you have the skills to look at a problem and find a simple and creative solution, you have the mindset of a Risk Manager. Individuals who are also interested in emerging technology in an evolving work environment are especially drawn to the Risk Management industry. With high-paying positions in a career with endless possibilities, being a Financial Security Risk Manager might be a career to consider.