First a quick synopsis of what a financial risk analyst does:
Risk analysts examine a firm’s investment portfolios, including overseas investments, and analyze the risk involved in associated decisions. They use their analytical skills to project potential losses, and make recommendations to limit risk through diversification, currency exchanges and other investment strategies.
This is what the typical day would look like for someone straight out of undergrad, working for a Fortune 100 financial services company. Financial risk is an umbrella term that covers multiple different risks within a company. The most common types of financial risk include: foreign investment risk, credit risk, asset backed risk, currency risk, liquidity risk, and equity risk. I personally am more involved in the market risk and foreign investment risk area. This could cover many different things, some examples would be analyzing current events that caused shocks in different currencies, or analyzing international deals that are on the slate. This work entails taking preventative and proactive measures to make sure international capital isn’t tied up by a foreign government.
A day in the life of a financial risk analyst.
6:00 AM – iPhone Alarm Goes Off
- Wake up, take a shower, shave, and have a quick bite to eat. Then I drive my car to the bus stop for the treacherous commute to New York City. I catch up with social media and friends while on the bus and listen to my favorite music on Apple Music. Many times I’ll use this time to take a quick nap as well. Now that Netflix offers offline play, sometimes I’ll watch an episode of some show. I always asked myself if I should live at home after college. In the coming months I plan to put an end to this commute, but it is something I deal with for now.
9:00 AM – Arrive At My Desk
- I get into the office at approximately 9:00 AM everyday and usually have a morning routine I follow. Usually I won’t have a 9:00 AM call or meeting, but on the off occasion that I do things would be a little different. On a normal day I would get comfortable, sometimes get a coffee, fill up my water bottle, and answer any emails I’ve received. These emails could range from managing directors telling me to update some PowerPoint deck’s with relevant information for the CRO, or my manager telling me he needs some sort of write-up or data analysis conducted before a certain time later in the day. Most of the analysis is conducted in excel, whereas a senior financial risk analyst would do some analysis in R (good tool for data analysis). You do need really good excel experience, as almost everything is done in excel, and it is the answer to every problem. A lot of employees also have their CFA designation completed, which I plan to pursue in the future. The CFA is by no means an easy exam to pass, there are multiple levels, and it takes hundreds of hours of studying for each level. Completing all three levels can bring many benefits to the future of your career, as well as the added bonus of prestige.
10:00 AM – Planning My Day Ahead
- Depending on what I have to get done, and by what time I start to plan my day ahead. I’ll quickly skim some news articles on what’s going on in the global markets and any important headlines that may have come out the day before. I’ll also start organizing my tasks and begin initially working on them. I may forward any relevant emails to my boss concerning anything that we are covering. From 10 AM to 12 PM there will usually be some sort of meeting that I would have to attend. It could be anything from the front-office briefing our teams on deals on the pipeline, working on some form of reporting, or maybe even some form of limit structuring.
12:00 PM – Lunch
- On most days I’ll grab lunch with some of my friends that I’ve made at work. I was lucky enough to have gone through the internship program prior to working at my company, so I was able to make a couple of friends my age from different areas within the company. My company also has a café indoors which is nice for the days when I’m busy or when the weather outside is bad. On some slow days, like Fridays, or days leading up to holidays, I’ll even go out and catch up with one of my friends in the area. A good rule of thumb is to never eat alone, and one great thing about working in the city is the crazy amount of different food places you have to pick from.
1:00 PM – Back At My Desk
- Once I’m back from lunch I’ll continue grinding on any on-going assignments or presentations that I must complete. This could involve an array of different things. To name some: doing data analysis by diving into the company’s different holdings and cutting the data in different ways, doing some sort of time series analysis, or maybe even creating some stress testing scenario(s). I might also receive feedback on something I had completed earlier in the day, and have to make any necessary changes or additions.
2:00 PM – Meetings, Meetings, and More Meetings
- The next two hours are usually filled with some sort of meeting. These meetings could involve on-going projects or analysis that is being conducted. They could also include some sort of limit breaches or governance around limits that we must manage and report out on. Sometimes it’s important for risk management to challenge a decision made by the front office and carry out their responsibility as the second line of defense. Having a healthy conversation is always good as it promotes clarity, and brings everyones different viewpoints to the table. This acts as a form of checks and balances.
4:00 PM – Winding Down
- Slowly the day starts winding down and the floor gets quieter. It’s usually my chance to continue working on something I left off earlier in the day, or start something that is due in the upcoming days. I may also use this time to go over my calendar for the next day and prepare for what I have in store.
5:30 PM – Heading Home
- Usually I’ll be out of the office by this time, but on the off occasion that something urgent comes along later in the day I could see myself stuck in the office till about 7:00 PM. Although this does not happen often, so majority of days I am on my way home. Since commuting kills so much of my time, by the time I get home and have dinner, I only have about an hour to relax. Then it’s back to the daily grind.
As you can see, working in risk management is not a career that is too taxing on oneself. A financial risk analyst has a good work life balance and can feel good about the work they’re doing to mitigate any sort of bad outcomes. The dynamic between front office and risk may not always be the most exciting, but that’s a story for another day. Becoming a financial risk analyst is definitely a great overall career choice. Granted that I can’t get too specific about the work I do, I hope this was a good overall explanation of what a day in the life of a financial risk analyst entails. It will be interesting to see how risk management evolves over time, and how increased regulation/deregulation can change the outcome of the risk management function.