Need for Market Risk Management
India has a growing corporate sector and the recent schemes of the government promoting entrepreneurship and manufacturing in India have led to a barrage of startups hitting the country’s economy out of the blue. Of course, budding businesses and startups both require investments. The Indian market thus is a gambler’s den for investors- they take a chance with their money and the risk-reward ratio is substantially large.
Market risk management courses prepare students with various tools of the trade to gauge this risk and employ appropriate risk management policies in order to help these investors reduce the chances of losing their invested capital in the name of bad investments and unnecessary risks. They handle improving and building upon pre-existing risk management models as well.
So the market risk management as a career has emerged out of a need for more stable investment decisions on the part of financial unions, banks, non-banking finance corporations, high net worth individual investors and investment firms. The entire job exists as a result of the various parameters being unresolved in the past resulting in unimaginable losses by these investor entities that could have been avoided if only a professional with the proper skill set could help their case.
Education and Eligibility
Market risk management is a very delicate job and has a very low margin for error. In other words- all mistakes cost the investors, literally. So in order to equip yourself with the right strategies, models and methods for proper risk estimation, analysis and management you should opt for market risk management courses.
An MBA in financial risk management or market risk management requires a bachelor’s degree and 10+2 with at least 60% aggregate scores and an acceptable score (varies according to B-School of choice) in any of the national level entrance examinations such as CAT, XAT, GMAT, etc.
A PGDM or postgraduate diploma in management can also be pursued in order to add the necessary skills needed to switch careers or probably explore other profiles in the same domain that may require a degree in risk management.
Distance learning and traditional courses both are an option. The fees varies in a substantial range between 25,000 rupees to 10 lakh rupees depending on the type of course and Institute of choice.
Skills required for the job
The job is one of those fields that requires some very particular skills to excel in. A risk manager must first be well aware of what’s going on under the hood of the organization he is serving such as how the supply chain is working, how operations are being handled, how is the financial model of the company set up, what’s the marketing plan for their products and services- if not in-depth, at least a basic understanding of these areas is first needed in order to assess the risk involved in the company’s initiatives as all of these areas factor into the risk.
Good analytical and statistical aptitude and a comfort level with numbers are crucial for this job as those make up a very large portion of the job. Communication isn’t the only key in this job but also crucial as a manager won’t be able to convey the purpose and plan of the risk management measures and policy or revised policy if he can’t articulate his own thoughts well enough for his teammates and peers to understand and implement.
Risk management holds the knowledge to a high accord and for good reason. Threats to information and financial security and investment keep changing every day and thus in order to create an efficient and effective policy to counter these risks to some extent the aphorism ‘Know thy enemy’ must be followed to the letter. If the risk manager is up to date with the risks that might pose themselves in the way of the company’s operations then he will be able to handle them better.
Job profiles and salaries
Market risk management might be a fairly new domain of management work but the career progression is fairly smooth. The most turbulence and saturation can be seen at the entry-level but with higher experience, the domain becomes more evened out. The most common job profiles available after completion of market risk management courses are Performance and Risk Manager, Risk Surveyor, Risk Management Adviser, Risk Analyst, Insurer, Senior Risk Advisor, etc. with a starting salary of 3-5 LPA, a mid-career salary of 7-8 LPA and late-career salary in the vicinity of 20LPA.
