Key Responsibilities and Required Skills for Director of Risk

🎯 Role Definition

The Director of Risk leads the organization's risk management strategy and execution across credit, market, operational, liquidity, model, third‑party and regulatory domains. This role develops and operationalizes the enterprise risk framework, defines risk appetite, delivers transparent board-level risk reporting, manages escalation and remediation of high-impact risk events, and partners with business leaders to embed a proactive, data-driven risk culture. The Director of Risk is both a subject matter expert and a people leader—responsible for building high-performing risk teams, influencing strategic direction, and ensuring compliance with applicable laws, regulations, and internal policies.

📈 Career Progression

Typical Career Path

Entry Point From:

Senior Risk Manager / Head of Operational Risk
Enterprise Risk Manager / Credit Risk Manager
Head of Compliance / Senior Risk Analyst

Advancement To:

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

Lateral Moves:

Head of Compliance / Chief Compliance Officer
Head of Internal Audit
Head of Financial Crimes / AML Officer

Core Responsibilities

Primary Functions

Define, build and continuously enhance the enterprise risk management (ERM) framework, policies and procedures to identify, measure, aggregate and control risk exposures across credit, market, operational, liquidity, model and concentration risk.
Lead development and maintenance of the organization’s risk appetite statement and tolerances; translate appetite into limits, metrics and actionable controls that align with strategy and capital planning.
Own end-to-end risk reporting to senior management and the board (including risk dashboards, heat maps, KPI/ KRI tracking, stress testing outputs and scenario analysis) to ensure transparent, timely and decision‑useful information.
Implement and oversee enterprise-wide stress testing and scenario analysis programs, interpreting results and recommending mitigation and capital actions to business leaders and the board.
Manage the risk identification and assessment lifecycle for material business initiatives (new products, geographies, vendors, M&A), conducting independent risk reviews and pre-launch approvals.
Build and lead high-performing risk teams (hiring, training, performance management, career development), creating a strong risk culture and consistent risk practices across functions and geographies.
Establish and manage risk governance forums (risk committee, model risk committee, asset & liability committee) and ensure appropriate documentation, escalation and remediation tracking.
Partner with finance and treasury to integrate risk inputs into capital planning, liquidity management, asset & liability management and stress loss forecasting.
Design and operate robust operational risk programs including loss event reporting, root cause analysis, corrective action plans and control testing.
Lead model risk management and validation efforts for quantitative models used in valuation, credit scoring, market risk and capital calculations; ensure model governance and independent challenge.
Drive credit and counterparty risk management policies, underwriting standards, portfolio limits, and monitoring to maintain asset quality and mitigate concentration risk.
Oversee regulatory compliance interfacing for risk-related matters (regulatory exams, supervisory reporting, remediation plans) and ensure remediation timelines and evidence are met.
Develop and operationalize third‑party/vendor risk management processes, vendor due diligence, contract risk assessments and ongoing monitoring of critical service providers.
Coordinate and respond to internal and external audits on risk topics; implement audit remediation plans and track progress until completion.
Lead or support enterprise-wide initiatives for anti‑money laundering (AML), Know Your Customer (KYC), sanctions screening and financial crime risk reduction where risk responsibilities intersect.
Implement data-driven risk analytics: design KRI/KPI measurement, build automated dashboards, use statistical and machine learning techniques for early warning and portfolio risk forecasting.
Design, manage and test business continuity and crisis management plans with a specific focus on operational resilience and recovery of critical processes.
Lead risk budgeting and resource allocation for the risk function, ensuring efficient use of risk tools, monitoring technology and analytics platforms.
Serve as a senior escalation point for major risk events, leading cross-functional incident response, post‑mortem root-cause investigations and stakeholder communications.
Build strong partnerships with legal, compliance, finance, product, technology and lines of business to influence product design, contract terms and operational controls to reduce risk exposure.
Oversee the development and delivery of risk training and awareness programs to embed consistent risk practices across the organization.
Maintain and improve Governance, Risk and Compliance (GRC) tooling and workflows (e.g., policy management, issue tracking, control testing) to support auditability and regulatory readiness.
Monitor relevant regulatory developments and industry best practices (Basel framework, Dodd‑Frank, IFRS/CECL implications, global prudential standards) and recommend changes to policies and controls.
Manage relationships with external stakeholders including regulators, rating agencies and auditors on material risk topics and strategic risk initiatives.

Secondary Functions

Support ad-hoc data requests and exploratory data analysis.
Contribute to the organization's data strategy and roadmap.
Collaborate with business units to translate data needs into engineering requirements.
Participate in sprint planning and agile ceremonies within the data engineering team.
Coach and mentor mid-level risk staff to help grow analytical capabilities and domain expertise.
Assist in vendor selection and implementation for risk analytics, GRC and model governance platforms.
Participate in mergers, acquisitions and integration risk assessments, providing due diligence and post‑close risk harmonization support.
Provide input to product and pricing teams on risk-adjusted returns and contract terms to protect the firm from outsized exposures.

Required Skills & Competencies

Hard Skills (Technical)

Enterprise Risk Management (ERM) frameworks and risk appetite design.
Regulatory expertise (Basel III/IV, Dodd‑Frank, CCAR, IFRS/CECL, local prudential rules).
Credit risk assessment, underwriting standards, loan portfolio management and impairment analysis.
Market risk measurement (VaR, stress testing, scenario analysis) and trading book risk oversight.
Operational risk management (RCSA, loss event data, control design and testing).
Model risk management, validation methodologies and quantitative model governance.
Risk analytics and statistical modeling — proficiency with Python, R, SAS or similar for data analysis.
SQL and data engineering familiarity to extract and manipulate risk datasets at scale.
Data visualization and reporting tools (Tableau, Power BI, Looker) for executive dashboards.
GRC platforms and tooling (e.g., RSA Archer, MetricStream, ServiceNow GRC) for issue tracking and policy management.
Credit/market risk systems knowledge (e.g., Moody’s, S&P tools, Bloomberg, RiskMetrics).
Third‑party/vendor risk assessment methodologies and contract risk mitigation techniques.
Business continuity, disaster recovery planning and operational resilience testing.
Financial statement analysis, capital planning and P&L risk attribution.
AML/CFT controls familiarity (KYC, transaction monitoring, sanctions screening) where relevant.

Soft Skills

Strategic leadership with the ability to translate risk strategy into execution and measurable outcomes.
Strong stakeholder management and executive presence; comfortable presenting to the CEO and board.
Excellent written and verbal communication skills; able to synthesize complex analysis into clear recommendations.
Influencing and negotiation skills to drive change across product and business teams.
Critical thinking and sound judgment under uncertainty and during crisis situations.
Team-building, mentoring and people development experience.
High ethical standards, integrity and a compliance‑first mindset.
Project management capabilities and experience driving cross-functional initiatives.
Adaptability and resilience in a fast‑changing regulatory and business environment.
Proactive, data-driven decision making and a continuous improvement mindset.

Education & Experience

Educational Background

Minimum Education:

Bachelor's degree in Finance, Economics, Business Administration, Mathematics, Statistics, Engineering, Computer Science or related field.

Preferred Education:

Master's degree (MSc, MS, MA), MBA, or relevant graduate degree in Finance, Risk Management, Statistics or Data Science.
Professional certifications such as FRM (Financial Risk Manager), PRM, CFA, CAMS, CISA or equivalent are strongly preferred.

Relevant Fields of Study:

Finance, Economics
Risk Management, Quantitative Finance
Statistics, Mathematics, Data Science
Business Administration, Accounting
Computer Science / Engineering (for model risk and analytics-heavy roles)

Experience Requirements

Typical Experience Range:

10–15+ years of progressively responsible risk management experience across banking, financial services, insurance, fintech or large corporate environments.

Preferred:

12+ years with at least 5 years in a senior managerial role leading multi-disciplinary risk teams and interfacing with executive leadership and boards.
Demonstrated experience building or maturing ERM programs, regulatory engagement experience, and a track record of embedding risk culture and controls into product and operational processes.