There has been much debate in recent years regarding the role of key risk indicators (KRIs) in risk management. In our recent survey, KRIs were identified as one of the next major areas of research and investment for operational risk management departments. One of the salient points of discussion has been the overlap between KRIs and KPIs (key performance indicators). The two bring together the similar business disciplines of performance management, risk management, financial management and corporate governance. Furthermore, the overlap of disciplines has created confusion about the different classes of KRIs and how they relate to each other.
This Chartis Research report examines the salient factors relating to operational risk KRIs and scorecards. Topics covered include:
- KRI classifications
- Which indicators are key
- Topology of a ‘Risk Scorecard’
- IT makes the scorecard work
- KRI communication
- Data storage and collection