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Key Responsibilities and Required Skills for Director of Risk Management

💰 $ - $

Risk ManagementFinanceComplianceGovernance

🎯 Role Definition

The Director of Risk Management leads the development, implementation and continuous improvement of enterprise-wide risk frameworks, controls and reporting. This role partners with business leaders, finance, compliance, audit and IT to identify, measure, monitor and mitigate material risks — including credit, market, liquidity, operational, model, compliance and third‑party risks — while ensuring compliance with regulatory expectations and internal risk appetite. The Director drives risk culture, governance, scenario analysis and stress testing, and serves as a trusted advisor to senior leadership and the Board on strategic and emerging risks.

📈 Career Progression

Typical Career Path

Entry Point From:

  • Senior Risk Manager or Head of Risk (Enterprise / Operational / Credit Risk)
  • Head of Credit Risk, Market Risk, or Operational Risk
  • Lead Risk Analyst / Risk Strategy Manager

Advancement To:

  • Chief Risk Officer (CRO)
  • Executive Vice President, Risk or Chief Risk & Compliance Officer
  • Head of Enterprise Risk Management or Group Head of Risk

Lateral Moves:

  • Head of Compliance or Regulatory Affairs
  • Head of Internal Audit
  • Head of Operational Resilience / Business Continuity

Core Responsibilities

Primary Functions

  • Develop, own and execute the enterprise risk management (ERM) framework, policies, standards and governance that align with the organization's strategy, risk appetite and regulatory expectations, ensuring scalability across business lines and geographies.
  • Lead design and maintenance of risk appetite statements, limits, and key risk indicators (KRIs); translate quantitative limits into practical business guidance and monitor adherence through dashboards and periodic reporting.
  • Oversee end‑to‑end credit risk governance including underwriting policy, portfolio stress testing, concentration risk management, limit setting and credit provisioning recommendations to executive leadership.
  • Build and maintain market risk and liquidity frameworks: daily P&L attribution, value‑at‑risk (VaR), sensitivity analysis, and contingency funding plans to ensure resilience under stressed market conditions.
  • Design and lead enterprise stress testing and scenario analysis programs (top‑down and bottom‑up), producing actionable insights for capital planning, contingency planning and senior management decision making.
  • Own operational risk management activities: identification, assessment, control testing, loss event collection, root cause analysis, and remediation tracking to reduce operational losses and improve control effectiveness.
  • Lead model risk management and model governance: validation, independent challenge, model inventory maintenance, model change control and documentation to satisfy supervisory and audit requirements.
  • Drive third‑party / vendor risk management program: due diligence, risk rating, contractual controls, ongoing monitoring and remediation escalation for critical service providers.
  • Manage regulatory engagement and compliance support: respond to supervisory requests, coordinate regulatory exams, prepare regulatory reports and ensure timely remediation of findings.
  • Provide risk insight to support capital planning, ICAAP/ORSA (where applicable), balance sheet optimization, strategic initiatives and M&A due diligence, quantifying potential risk and return tradeoffs.
  • Develop and maintain enterprise risk reporting for the Board, Risk Committee and C‑suite: concise risk dashboards, heat maps, trend analysis and escalation of material risks with recommended mitigants.
  • Establish strong relationships with business leaders to provide proactive risk advisory and independent challenge during product launches, pricing strategies, new market entries and large commercial transactions.
  • Implement a risk taxonomy and maintain a centralized risk register, ensuring consistent identification, prioritization and lifecycle management of risks across the organization.
  • Lead the design and continuous improvement of controls testing and monitoring programs, working closely with Internal Audit to remediate control weaknesses and close risk‑based findings.
  • Create and manage enterprise fraud risk and anti‑fraud strategy in partnership with security, operations and legal teams to minimize financial and reputational exposure.
  • Oversee data governance and risk data strategy to ensure high quality, timely data for risk measurement, capital calculations and regulatory submissions; drive automation and data lineage improvements.
  • Lead people management for the risk organization: hire, coach, develop and retain high‑performing risk professionals; set clear objectives, succession plans and career paths.
  • Maintain and enhance risk culture and training programs across the enterprise, including targeted training for high‑risk functions and scenario‑based workshops for senior leaders.
  • Lead incident response and crisis management activities related to systemic risk events; coordinate cross‑functional stress response plans and post‑incident risk remediation.
  • Drive continuous improvement and automation initiatives, leveraging analytics, machine learning and visualization tools (e.g., Python/R, SQL, Power BI/Tableau) to advance risk measurement and reporting capabilities.
  • Ensure robust compliance with consumer protection, AML/KYC, sanctions, data privacy and other regulatory requirements in coordination with Legal and Compliance teams.
  • Establish and manage a risk‑based capital and liquidity contingency framework to preserve franchise value under adverse macroeconomic scenarios.
  • Provide independent challenge and assurance on pricing, provisioning, capital allocation and new product approvals to ensure risks are properly reflected in business decisions.
  • Represent the organization in industry forums and regulator engagements on emerging risks, best practices in risk management, and major regulatory initiatives.

Secondary Functions

  • Support ad‑hoc risk analytics and management information requests, producing insights and tailored reporting to address executive and board queries.
  • Contribute to the organization's risk data strategy and roadmap by specifying data requirements for risk models, dashboards and regulatory submissions.
  • Collaborate with IT, data engineering and business units to translate risk measurement and reporting needs into technical requirements and delivery roadmaps.
  • Participate in project governance and change control for major initiatives (digital transformation, core system replacements, M&A) to ensure risks are identified and mitigated pre‑launch.
  • Provide subject matter expertise for internal investigations, audit reviews and regulatory examinations; draft responses and remedial action plans.
  • Support enterprise resilience and business continuity planning efforts by reviewing recovery plans and participating in scenario testing.
  • Mentor and cross‑train risk, compliance and control owners to broaden organizational understanding of risk frameworks and controls.
  • Assist in vendor selection and oversight for GRC platforms, risk analytics providers and model validation consultants.
  • Conduct periodic risk program health checks and benchmarking exercises to identify capability gaps and recommend roadmaps for improvement.
  • Participate in cross‑functional steering committees to ensure risk‑sensitive decisions are escalated and documented.

Required Skills & Competencies

Hard Skills (Technical)

  • Enterprise Risk Management (ERM) framework design and implementation experience.
  • Strong knowledge of regulatory frameworks: Basel III/IV, CCAR, DFAST, ICAAP/ORSA, IFRS 9, CECL and local banking regulations.
  • Credit risk management: underwriting policy, portfolio analytics, provisioning methodologies and concentration risk measurement.
  • Market and liquidity risk measurement: VaR, stress testing, scenario analysis, sensitivity analysis and contingency funding planning.
  • Operational risk management: loss data capture, KRIs, control testing and remediation tracking.
  • Model risk management: validation, back‑testing, model governance and documentation.
  • Third‑party and vendor risk assessment methodologies and contract/SLAs oversight.
  • Risk data management and data lineage: strong familiarity with data governance, risk data aggregation (BCBS 239 principles) and data quality controls.
  • Quantitative analytics: statistical modeling, stress/scenario modeling, credit portfolio modeling, experience with Python, R, SAS or similar.
  • SQL and data query skills for ad‑hoc analytics and risk reporting.
  • Experience with visualization and BI tools (Power BI, Tableau, Qlik) to build executive risk dashboards.
  • Familiarity with GRC and risk management platforms (e.g., RSA Archer, MetricStream, Riskonnect).
  • Experience preparing board‑level risk reporting and regulatory submissions.
  • Financial statement analysis, capital planning and ALM (asset & liability management) experience.
  • Project management skills for leading cross‑functional initiatives and remediation programs.

Soft Skills

  • Strategic thinker with the ability to translate regulatory and macro trends into actionable enterprise risk strategies.
  • Exceptional executive communication skills, capable of presenting complex risk issues clearly to Boards and senior leaders.
  • Influencing and stakeholder management with proven ability to challenge business lines while maintaining collaborative relationships.
  • Strong leadership and people development skills with experience building high performance teams.
  • High degree of integrity and sound judgment under pressure; decisive in crisis situations.
  • Problem solving and critical thinking with an analytical, data‑driven mindset.
  • Change management and continuous improvement orientation — able to lead culture and process changes.
  • Project prioritization and time management with a focus on delivering high‑impact outcomes.
  • Diplomacy and negotiation skills for vendor and regulator interactions.
  • Coaching and mentoring aptitude to develop next generation of risk talent.

Education & Experience

Educational Background

Minimum Education:

  • Bachelor's degree in Finance, Economics, Risk Management, Statistics, Mathematics, Business Administration or a closely related field.

Preferred Education:

  • Master's degree (MBA, MSc Finance, MSc Risk Management) or relevant advanced degree.
  • Professional certifications such as FRM (Financial Risk Manager), CFA, PRM, CPA or CAMS are highly desirable.

Relevant Fields of Study:

  • Finance
  • Economics
  • Risk Management / Quantitative Risk
  • Actuarial Science
  • Statistics / Applied Mathematics
  • Business Administration / Management

Experience Requirements

Typical Experience Range:

  • 10–20+ years of progressive experience in risk management, credit, market, operational or model risk, with at least 5–8 years in senior leadership roles.

Preferred:

  • 15+ years of experience within financial services, banking, insurance or FinTech with demonstrated success building and leading enterprise risk programs and direct exposure to regulatory interactions and board reporting.
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