What exactly is risk control?

Whether in the field of traditional finance or Internet finance, risk control has become a tight occupation. This is related to the diversification of the financial field in recent years, and users pay more and more attention to risk control.

Risk control includes two kinds of work, namely risk management and internal control, but in different types of enterprises, the direction of risk control management and control will be different.

This is not a new occupation, but we find that its career development momentum is getting better and better. According to the statistics of Kerry International, the salary increase of various functional departments in the financial industry is between 5%- 15%, although the middle and back-office departments are still not as high as the front-office departments. "However, risk control is a relatively high increase in other functional departments in the middle and back office." Li Wei, director of Ke Rui International Financial Industry, said.

There are two main reasons for such a favorable salary increase. Cui Nan, managing director of Fulham Consulting, believes that one of the reasons is the shortage of talents. In the past, many people didn't realize the importance of risk control, so they didn't want to enter this industry. On the other hand, this is a job that requires professional skills, so there are not many practitioners on the whole. The second reason is that Internet finance has developed very rapidly in the past two years, and the emergence of large and small P2P platforms has spawned the demand for risk control talents. In addition, banks, insurance, futures, credit, small loans, small micro-loans, PE, VC and other industries themselves have great demand for risk control talents, so there is a gap in such talents. The talent competition among these enterprises has also raised the income of risk control personnel to a higher position.

Of course, risk control not only appears in financial institutions, but also exists in various industries. Peng Pinggen, executive general manager of CIIC Talent Evaluation and Development Center, said that many enterprises have started to set up risk management or internal control departments to identify, analyze and evaluate various risk factors that may be encountered. But on the whole, most of the risk control work of enterprises focuses on post-event inspection and evaluation. Therefore, the risk control work with the highest demand and the most complete system is still concentrated in the financial field.

The risk control work in the financial field belongs to the central Taiwan department, and it needs to participate in the risk assessment and audit process of specific businesses, not just the inspection and evaluation afterwards. It usually covers credit risk, market risk, operational risk and so on. It has the characteristics of the financial industry and often has greater power.

The pressure of high income and no performance has made more and more people want to transform into risk control. They often come from other functional positions in the financial industry, such as bank tellers, financial consultants, auditors of consulting companies and accounting firms. Now the emergence of some new financial institutions has also increased the choices of those who are interested in it.

What is the threshold for risk control positions? What is the difference between the risk control positions of different types of financial institutions? What can I gain from doing risk control work?

Generally speaking, the work involved in the risk control post includes business audit (audit before business happens, which usually fails, and business cannot be executed), risk monitoring (continuous risk monitoring after business happens, including early warning and response) and comprehensive business management (statistical analysis of data, etc.). However, in banking, insurance, trust, futures, P2P internet finance and third-party payment platforms, the focus of risk control work is not the same.

1, bank

Compared with other types of financial institutions, the risk management department of banks is more mature. 1The Basel Accord formulated by the "Basel Committee" in July, 988 established clear risk management standards for global commercial banks and determined what types of risks to manage. "In particular, how to control credit risk, market risk and operational risk is very clear." Cui Nan said.

Loan business accounts for the highest proportion in the daily work of bank risk control. The mid-range risk control department often starts to enter the risk review when the customer reads the loan details to see whether the personal risk assessment of the loan object meets the requirements, and the business after risk assessment will be submitted to the higher management office for approval—that is, the risk control work exists in the transaction process.

This operation mode of bank risk control has also become the mother of risk management in many financial institutions. "For example, the insurance industry mostly refers to the practice of banks," Cui Nan said.

2, futures, trust, small loans, financial leasing enterprises

From the perspective of risk management, futures, trust, microfinance and financial leasing enterprises are all relatively new types. Their risk management focuses on risk, focusing on credit risk, operational risk, market risk, counterparty risk and so on.

The emerging characteristics of these industries are also reflected in the complexity and innovation needs of the business. For example, trust, using real estate as a trust product is different from using a car as a trust product. To some extent, every project needs to develop a set of innovative financial products. "When an innovative product comes out, whether it can become a fund or not, whether it can be put on the market will be reviewed by their risk management departments." Cui Nan said. In this case, does the risk management department need to judge whether the risk of this new product is controllable? How big is the risk control exposure? In case something goes wrong, the project collapses, and depositors or investors come to the company to ask for money, what is the financial pressure of rigid payment? "How likely is this project?" Cui Nan explained.

The opinions of risk management department on new product approval are very important. "If the risk management department or the risk management committee doesn't approve it, this new business may really be rejected. This is a powerful department. " Cui Nan said.

3. Online Personal Credit (P2P)

Compared with the traditional financial field, P2P is still in its infancy, and risk management may not be perfect. "When some enterprises make such financial products, they may just dig one or two people from financial enterprises to start managing risks. Their risk management is mainly credit risk review." Cui Nan said.

4. Third-party payment platform

The risk control of the third-party payment platform is a completely different concept. Alipay and WeChat wallets, which we usually contact the most, belong to third-party payment. In these applications, risk control personnel need to pay more attention to the front-end products involved in the operation process, such as password locks and payment verification. Their job is mainly to protect users' transaction security.

Long Tu, a senior security strategy expert in Alipay's big security-security strategy, said that third-party payment platforms pay more attention to the risk of fraudulent transactions in online real-time transactions than banks pay attention to credit risks. If there is a problem with the transaction and the user's funds are stolen, the third-party payment platform needs to bear the corresponding compensation.

For this emerging field, Cui Nan believes that the lack of industry supervision and the tightness of risk management depend entirely on the company's top management's understanding of risks. "They will have business pressure. When seizing the market, risk control may not be fully implemented according to the ideal state. "

Regardless of traditional finance or internet finance, risk control is a post with high requirements for hard skills, but according to the different work content, the requirements for company people are also different.

In the traditional financial field and P2P, the knowledge and experience related to the financial industry is very important.

For graduates, although most financial institutions and enterprises hold the concept of "it's all blank paper anyway, I can use our system to cultivate it", if they are financial majors, they will be more competitive if they have some professional certificates such as FRM financial risk managers, CFA chartered financial analysts and CIPRM registered risk managers in China.

For social recruitment, risk control talents mainly come from two channels, one is to find people from other similar institutions; The other is from a large accounting firm or consulting company. The company people from the latter often have some external service experience in financial enterprise approval or enterprise risk control.

Third-party payment platforms require candidates to have data application ability and systematic thinking ability because of different job contents.

"All our risks are based on data, so if we don't understand the data, the information that affects the risk control system cannot be collected." Longtu takes Alipay as an example. Alipay may have tens of millions of trading users every day, and each operation will generate a lot of data. The risk control personnel of Alipay must analyze and monitor these data in real time, and then identify some abnormal transactions.

System thinking ability can help risk control personnel to consider solutions from multiple dimensions, including data, business, products, user experience and so on. This can be done not only by using a good data model, or only by relying on good products, but also by integrating various capabilities.

Both traditional finance and internet finance are facing the challenge of continuous development and iteration, which makes risk control personnel must maintain strong learning ability and curiosity.

The risk control of different types of financial institutions and enterprises will present different working conditions because of their different functions.

Usually, the risk control departments of some big banks belong to the departments with less work pressure in the industry because of their stable business, large scale, sufficient personnel and small workload. However, the risk control function of some multinational banks is often concentrated in foreign headquarters or regional centers, and the risk control department in China plays more of an executive role, which will limit the individual's ability and growth space.

In some large financial institutions, the focus of risk control is how to transform the risk preference of leaders into reasonable risk control indicators and highlight their own value.

"The risk control of some small and medium-sized financial enterprises and non-bank financial institutions, due to the complexity of business types, high innovation and great changes, is often insufficient for risk control personnel to undertake a greater workload." Cui Nan said. The functional pressure of such risk control personnel often comes from not only controlling risks, but also improving work efficiency, that is, killing projects well, not leaking bad projects and not delaying business opportunities. There may be pressure from the business department at this time. "How to find a balance between business development and risk management, and how to adhere to the professional judgment of risk control under pressure are all things that a good risk controller needs to consider." Cui Nan said. Relatively speaking, the risk control personnel of such enterprises are under greater pressure and their ability is improved faster.

The risk control work of the third-party payment platform is more product-oriented, so it has its own uniqueness.

The first is rapid response, because the use of third-party payment platforms happens all the time, so once risk problems are discovered, risk control personnel should immediately follow up and solve them, even in the early hours of the morning or holidays.

Secondly, we should always pursue a better customer experience and constantly improve the experience of risk control products and safety products. For example, payment verification business, under the premise of SMS reminder, constantly explore better reminder methods, and try new technologies such as fingerprint, face recognition and voice recognition. This part of the work may not be common in traditional financial institutions.

In addition, for companies that want to reach a high level in the field of risk control, decision-making ability will be a challenge-both business and risk management.

The business functions of financial institutions and third-party payment are quite different, and it is difficult to switch between them, but the career development route is clear.

In most financial institutions, the career promotion of risk control positions often leads to the chief risk officer, who may eventually become the vice president of a bank or the deputy general manager of other financial institutions, mainly responsible for risk control.

The situation of third-party payment platforms is similar. According to Longtu, with the deepening of business, risk control personnel often have three development directions, one is to become an expert in the field of risk, the other is to become an expert in the field of data, and the third is to become an expert in the field of products. The data capability is not only in the field of risk control, but also in other fields.

In terms of specific industries, the salary increase of bank risk control is between 5%- 10% on average; The insurance industry is relatively stable, because the insurance circle is narrow, the turnover rate of risk control is small, and the salary increase is not large. "The salary increase of foreign risk control in the securities fund industry is very different, and it is impossible to draw a clear reference standard." Li Wei said.

From a regional perspective, the demand for risk control personnel is mainly concentrated in first-tier cities. Although the demand in second-and third-tier cities is large, the wages are low.

The average annual salary of bank risk control personnel with 5 to 10 years of experience in first-tier cities is between 300,000 and 600,000 yuan; 10 above the risk control salary of working experience in the insurance industry is about 700,000 for foreign companies and 600,000 for local companies; The annual salary of a risk control manager with 5 to 8 years working experience in the securities fund industry in a local enterprise is generally between 300,000 and 800,000 yuan.

Most of the risk control personnel in P2P industry and third-party payment industry come from banks or the same industry. In the process of job-hopping, their salary will be greatly improved, and the growth rate can reach 30% to 50%. "The Ali system may be higher." Li Wei said.

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