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The banking sector serves as a crucial cogwheel. It facilitates the flow of money in the economy and performs important functions for society through many services, such as the safeguarding of customer deposits, the provision of credit, payment processing, asset management, market-making and proprietary trading.

The risk management principles embodied in traditional actuarial work have broad applicability in the management of banking products (which tend to have a shorter risk horizon than traditional insurance and pension products). Actuarial skills may be applied to:

  • quantifying credit risk parameters for credit loss allowances and risk-weighted assets;
  • liquidity, interest rate risk and capital management within bank treasury functions;
  • customer credit risk scoring, segmentation and risk-based pricing of banking products; and
  • enterprise-wide stress testing and capital adequacy assessments.

While there are many professions that contribute to the banking sector, actuaries possess a unique skill set and expertise in risk management that are tailored to meet the needs of an evolving professional landscape.

Banking resources