Online Master's Degree in Risk ManagementRecently, New York’s banking regulators announced new risk management rules for banks operating in the state. The rules require stricter risk management oversight at the boardroom level. The immediate goal is to improve risk management by deterring money laundering and potential terrorist activity.

New York’s Financial Services Superintendent Maria Vullo summed it up frankly, “It is time to close the compliance gaps in our regulatory framework to shut down money laundering operations…”.1

New York’s Financial Services Superintendent Maria Vullo summed it up frankly, “It is time to close the compliance gaps in our regulatory framework to shut down money laundering operations…”.1

Other than tax avoidance, money laundering schemes sometimes support the funding of terrorist operations. In the wake of December’s San Bernardino shooting and the recent Orlando nightclub tragedy, financial institutions and regulators are becoming more vigilant to new threats. The San Bernardino shooter allegedly had his operation at least partly funded by a peer-to-peer loan website.

An increasing scrutiny on financial transactions is underway and the United States is doing everything possible to cut off funding to the Islamic State. Expect this to continue.

This new legislation is focusing on corporate leadership, especially the Board of Directors, to ensure they are directly involved in the policing process.2 This is similar to the Sarbanes-Oxley regulations which put the onus on the individuals when they sign off on financial documents, which targeted C-suite executives including the Chief Financial Officer, CFO, and Chief Executive Officer, not to mention the auditors the financial analysts themselves.3

Now the regulations won’t actually go into effect until January 1st of 2017 but the message is clear-get your compliance in order now. Of course, there are existing regulations in force to combat illegal activity including the comprehensive Patriot Act and also the Bank Secrecy Act. The latter requires banks to report suspicious transactions and cease any activities with various sanctioned entities including flagged foreign governments.4

And the penalties for non-compliance can be stiff, as France’s BNP Paribas knows all too well. In 2014, the firm received the largest fine in history, an astounding $8.9 billion, for doing business with Cuba, Iran and Sudan, a breach of United States sanctions.5

And the penalties for non-compliance can be stiff, as France’s BNP Paribas knows all too well. In 2014, the firm received the largest fine in history, an astounding $8.9 billion, for doing business with Cuba, Iran and Sudan, a breach of United States sanctions.5 The fines are commensurate with the degree of the indiscretion. BNP Paribas’ fine almost exactly matches the amount of business it did with these sanctioned entities, $8.8 billion.6 Despite protests from French President Francois Hollande, the punitive nature of the fine also stemmed from a lack of cooperation with American authorities on the case.

But it’s not just BNP Paribas that has received fines for business dealings with sanctioned organizations. HSBC was fined over $1 billion, in part for allegedly helping launder roughly $881 million in drug money through the U.S. financial system.7 We expect the damages to only get more punitive. Banks also need to be hyper-vigilant when it comes to third-party affiliates such as suppliers and also its overseas subsidiaries who are typically monitored less.

The issue gets murky with financial institutions that aren’t regulated by the Federal Reserve, including so-called industrial banks. These banks, while FDIC insured, operate with little regulatory oversight (we reported on them with our look at Utah-chartered industrial banks and their involvement with peer-to-peer, P2P lenders). Federal authorities are increasingly scrutinizing these financial institutions that operate on the fringes of our monetary system.

Risk Management Careers

With an increasingly stringent regulatory environment, the demand for well-qualified compliance professionals is more prevalent than ever. But these jobs are highly competitive, as more financial professionals see the writing on the wall- banks will be increasingly focused on risk management rather than simply maximizing profit. Further, a solid risk management culture is increasingly viewed as a competitive advantage among financial institutions. If the idea of deterring and detecting fraudulent activity sounds interesting, you might consider a career in risk management.

Enterprise Risk Management Degrees

A degree in risk management may open doors to well-compensated, fast-growing careers including risk manager, market research analyst and risk analyst. According to Payscale, the median pay of risk managers is an impressive $82,083.8

Increasingly, ambitious professionals are choosing the more flexible path of pursuing degrees online. Johns Hopkins Master of Science in Risk Management is AACSB accredited part-time program is tailored to the demands of your professional and personal life, letting you stay on your career track while earning your degree.

  • Conveniently attend classes in Baltimore or Washington, D.C.
  • Complete your degree within 3 years or take up to 6
  • GRE/GMAT waiver request available based on evaluation of work experience and academic background
  • Merit-based scholarships are available for those who qualify
  • Virtual open house attendees are eligible to receive an application fee waiver – request information to learn how

The MS in Enterprise Risk Management is available as a full-time or part-time program. The part-time program is intended for students with two or more years of professional experience.

Learn more about Johns Hopkins Master of Science in Risk Management today.

 

1,2http://www.cnbc.com/2016/06/30/reuters-america-new-york-banking-rule-puts-boards-on-the-hook-to-fight-illicit-financing.html
3https://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act
4http://www.occ.gov/topics/compliance-bsa/bsa/bsa-regulations/index-bsa-regulations.html
5https://risk.thomsonreuters.com/en/resources/infographic/fines-banks-breached-us-sanctions.html
6,7http://www.americanbanker.com/gallery/the-seven-largest-sanctions-related-fines-against-banks-1068360-1.html
8http://www.payscale.com/research/US/Job=Risk_Manager/Salary