Pranav Krishna
Consultant at Universal Consulting
Risk consulting is a specialized field of consulting that helps businesses identify, assess, and mitigate risks, allowing them to make informed decisions and thrive amidst uncertainty. Examples of risk consulting projects include developing cybersecurity strategies for a national bank or defending global supply chain risks for a manufacturing company.
Let’s face it – business is risky. In today’s fast-paced world, companies face many types of risks that can impact their success. Risk consultants protect businesses from potential threats and navigate these challenges effectively.
In this article, we’ll discuss:
- An overview of risk consulting
- Key differences between risk consulting and management consulting
- Top risk consulting firms to learn about
- 5 tips on how to land risk consulting jobs
Let’s get started!
What is Risk Consulting?
Risk consulting helps organizations identify, assess, and manage potential risks to their business. The goal of risk consulting is to ensure that businesses are better prepared to mitigate potential risks and respond effectively when unforeseen challenges arise.
Risk consulting encompasses internal and external risks across areas like operations, finance, regulatory compliance, strategy, etc. Risk consultants work with clients, such as financial institutions, manufacturing companies, tech firms, and governmental organizations. As a risk consultant, your work will involve assessing and prioritizing risks, crafting strategies to manage them, conducting audits to ensure compliance, and monitoring emerging risks.
Here are examples of questions that risk consultants address:
- How can a company safeguard its financial assets against market volatility?
- How can operational processes be improved to prevent disruptions?
- How can a business ensure compliance with changing regulatory requirements?
- What strategies can protect a company’s reputation in a crisis?
Different Risk Consulting Practice Areas You Can Specialize In
There are many practice area niches within risk consulting. While not exhaustive, this will give you a better understanding of the type of work you might be interested in.
- Financial Risk Management: Financial risks involve any potential financial loss due to factors, such as market volatility, credit defaults, or liquidity shortages. Risk consultants help businesses manage exposure to currency fluctuations, interest rate changes, and credit risks.
- Operational Risk Management: Operational risks stem from internal processes, systems, or external events that could disrupt a company’s operations. Examples include technology failures, supply chain disruptions, or human error. A risk consultant conducting an operational risk audit would assess the vulnerability of a company’s operations to potential disruptions and develop contingency plans.
- Regulatory/Compliance Risk Management: Compliance risk arises from failing to adhere to laws, regulations, or industry standards, which can result in fines, legal penalties, or operational shutdowns. Risk consultants help businesses navigate complex legal landscapes, ensuring they comply with local and international regulations.
- Strategic Risk Management: Strategic risks impact an organization’s overarching objectives and long-term business goals. These can arise from a company’s high-level business decisions, such as entering new markets, competitive threats, mergers, or acquisitions. Consultants in this space analyze potential risks from market changes or competitor activity and help businesses make informed decisions about growth or restructuring.
- Reputational Risk Management: Reputational risk refers to potential damage to a company’s public image due to bad publicity, product performance, poor customer service, actions of employees, etc. Risk consultants work on assessing such risks and develop reputation management strategies, helping companies maintain a positive public image.
- Cybersecurity Risk Management: Increasingly, companies face the risk of cyberattacks, data breaches, and IT infrastructure vulnerabilities. Given its significance, it is categorized separately, despite falling under both operational and reputational risks. Risk consultants in this field assess vulnerabilities in IT systems, develop security protocols, and implement measures to protect sensitive data.
- Enterprise Risk Management: Enterprise Risk Management (ERM) takes a holistic view of risks across all areas of an organization instead of isolating risks by department. ERM consultants help identify, assess, and manage risks to financial stability, operations, regulatory compliance, and reputation. ERM takes an integrated approach to understanding how different risks interrelate and impact the organization as a whole.
Let’s take a look at some real project examples:
- Conducting a supply chain risk audit for a global car manufacturer, identifying operational risks related to supplier reliability, and implementing strategies to minimize production disruptions
- Developing a regulatory compliance framework for a multinational bank expanding into Southeast Asia, ensuring alignment with local financial laws and minimizing exposure to legal risks
- Performing a cybersecurity risk assessment for a fintech startup, identifying weaknesses in their payment processing systems, and implementing a mitigation plan to protect against data breaches and fraud
Similarities and Differences Between Risk Consulting and Management Consulting
Risk consulting shares some similarities with traditional management consulting, but there are key differences.
Similarities:
- Client-centric Problem-solving: Both risk and management consultants serve as trusted advisors to their clients. They provide expert advice based on data, industry knowledge, and strategic thinking. The goal is always to guide the client toward better decision-making, mitigating risks, or improving business performance.
- Data-driven Approach: Consultants in both fields rely heavily on data analysis to inform their recommendations. While risk consultants may focus more on risk assessment metrics (e.g., stress tests and risk models), management consultants work with operational and financial data to enhance business performance.
- Strong Communication Skills: Both risk and management consultants must be capable of effectively communicating their findings and recommendations to clients, often requiring synthesizing complex information.
- Diverse Industry Exposure: Whether advising on mitigating risks or operational improvements, both categories of consultants apply their expertise across finance, healthcare, manufacturing, technology, and other fields.
Differences:
- Focus of the Work: The primary difference lies in the objective: risk consulting focuses on identifying and mitigating potential threats, while management consulting aims to enhance business performance by advising clients on business strategy, operations, and growth.
- Approach to Problem-solving: Risk consultants assess vulnerabilities through risk modeling and scenario analysis, and develop frameworks to manage such risks. Management consultants use data analysis and market research to take a big-picture approach to help their clients reach their strategic objectives.
- Skillset and Industry Knowledge: Risk consultants typically require specialized skills, such as in risk modeling and financial analysis. They need to have a deep knowledge of risk management frameworks and regulatory & compliance frameworks. On the contrary, management consultants possess broader business acumen, with a strong focus on problem-solving and strategic thinking.
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Top 8 Risk Consulting Firms You Should Know About
There are 2 types of risk consulting firms:
- Generalist consulting firms (like Big 4, MBB) with a risk consulting practice
- Specialist risk consulting firms that are dedicated exclusively to this field
Let’s explore some key players.
Generalist Consulting Firms with a Risk Consulting Practice
KPMG Risk Services
KPMG Risk Services is a global leader in risk consulting, ranking No.1 across several risk advisory categories in the “Perceptions of Risk Firms 2023” study. The firm provides clients across diverse industries with services to identify, assess, and mitigate risks. Their areas of expertise include enterprise risk management, cybersecurity, regulatory compliance, financial risk management, and forensic investigations.
McKinsey Risk & Resilience Consulting
McKinsey Risk & Resilience Consulting provides clients with strategic insights for risk management and crisis preparedness. The firm provides strategic insights and actionable solutions across key areas, including enterprise risk management, cybersecurity, operational resilience, climate risk, and crisis response, leveraging advanced analytics and deep industrial knowledge.
Deloitte Risk Advisory
Deloitte Risk Advisory supports clients in building resilience during crises by crafting tailored, strategic risk management plans that address a range of critical areas. Their expertise spans cybersecurity, financial and operational risk, regulatory compliance, and sustainability, including climate risk.
PwC Risk Consulting
PwC’s risk consulting services span areas like financial risk, IT risk, and regulatory compliance. Their integrated risk solutions help organizations maintain operational efficiency while navigating complex legal and compliance landscapes. PwC is particularly known for its internal audit and IT risk management solutions.
Specialist Risk Consulting Firms
ICA Risk Management Consultants
Established in 1957, ICA Risk Management Consultants provides clients across many industries with risk management services and solutions to insurance challenges. Their key areas include comprehensive risk management, enterprise risk management, disaster planning, and business continuity support.
Albert Risk Management Consultants
Founded in 1967, Albert Risk Management Consultants has a team of 140 professionals providing clients across industries such as real estate, healthcare, manufacturing, and technology with risk management solutions. Their focus areas include compliance review, enterprise risk management, and alternative risk management.
The Risk Advisory Group
The Risk Advisory Group is a global consulting firm that offers strategic intelligence to guide businesses in their corporate decisions. The firm specializes in due diligence, new market intelligence (navigating risks associated with entering new markets), and mergers & acquisitions target evaluation (navigating risks tied to new partnerships). Founded in 1997, The Risk Advisory Group operates with 100+ professionals across 6 global locations.
Kroll
Kroll is a financial and risk advisory firm with roots tracing back to 1932. With over 6,500 professionals across 32 countries, Kroll provides its clients with services in cyber risk, compliance and regulation, enterprise risk management, supply chain risk management, and regulatory compliance.
5 Tips On How to Break Into Risk Consulting
1. Get Risk Management Certifications
Firms highly value risk management certifications, as they demonstrate experience and knowledge in the field of risk management, particularly in niche areas. Some examples include Certified Risk Management (CRM), Financial Risk Manager (FRM), Chartered Enterprise Risk Analyst (CERA), and Risk and Insurance Management Society Certification (RIMS).
Most certifications require a bachelor’s degree and relevant work experience in risk management or related fields. Candidates must complete coursework, typically a few months to a year, followed by an exam.
2. Highlight Relevant Risk Experience
Gaining practical experience in fields like cybersecurity, regulatory compliance, or financial risk through internships, or as a risk analyst intern can make your application more attractive. Internships with financial institutions, tech firms, or government regulatory bodies can offer hands-on exposure to risk management challenges. These experiences can demonstrate the practical understanding of industry-specific risks that risk consulting firms will value.
3. Develop Analytical Skills
In risk consulting, strong data analysis skills are essential for identifying patterns, trends, and risks. Building proficiency in tools like Python, R, data visualization software, and data interpretation will greatly enhance your chances of landing a role at risk consulting firms.
4. Stay Informed on Emerging Risks and Industry Trends
Be up to date with current trends, developments, and potential risks across key industries. Subscribing to risk management blogs, following industry reports, and staying updated on regulatory changes can help you stay ahead. Blogs like Risk.net and RIMS provide valuable insights into the risks prevalent across industries, giving you an edge in tackling client problems.
5. Demonstrate Problem-Solving Skills Through Case Interviews
Case interviews often present real-world scenarios where you’ll break down complex problems, assess risks, and propose practical solutions. Solving a case demonstrates your ability to structure your thoughts and address complex problems step by step. Practice structuring your approach clearly and applying frameworks.
For an in-depth guide, check out Consulting Case Interview Prep: The Ultimate Guide.
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In this article, we’ve covered:
- An overview of risk consulting: what it is and its practice areas
- Similarities and differences between risk consulting and management consulting
- Examples of top risk consulting firms
- 5 tips on how to land a risk consulting job
Still have questions?
If you have more questions about risk consulting, leave them in the comments below. One of My Consulting Offer’s recruiters will answer them.
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