The global study identifies and defines key risk indicators in the financial services industry.
Philadelphia, PA (August 18, 2005)—The Risk Management Association (RMA) has published the final report on the KRI Study for Banking, a global effort to identify and define key risk indicators (KRIs) within the financial services industry. As announced by RMA at the inaugural KRI Conference held in New York in January 2005, the KRI Study for Banking has now been succeeded by KRI Services, a set of KRI-related services offered by RMA and delivered by RiskBusiness International. A new study focused on KRIs for Insurance was launched late in 2004.
The report is available only to KRI Services subscribers. It describes the KRI Framework underlying the KRI Library, the process by which the more than 1,800 indicators within the Library were identified, ranked, and specified and the manner in which consolidated operational risk maps were derived, at both the organizational and individual product level. The report also contains, for each of the 37 product groups covered, a listing of the top 20 indicators, based on subscriber usage and deemed effectiveness in monitoring, measuring, and identifying risk. The KRI Library is a Web-based repository located at http://www.kriex.org/.
Commenting on the report, Carole Carpentier, senior manager, Operational Risk at RBC Financial Group, the current chair organization for KRI Services, said, “The KRI Study is a prime example of RMA advancing the use of sound risk principles in the financial services industry. As a result of the KRI Study, financial services companies around the world can now 'speak KRI' fluently. The underlying framework has given us a common language, but more useful yet, the framework supports an integrated approach to enterprise operational risk management (ORM). KRI Services has transformed the study results into a permanent industry resource. Subscribers to KRI Services can take the framework, the common language, and the growing library of indicators to build effective KRI programs that work with and support their other ORM activities. Subscribers also drive the emergence of KRI best practices through their participation in the industry working groups and Benchmarking Services.”
Charles Taylor, RMA director of operational risk, said, “KRI Services has grown since the completion of the KRI Study for Banking. We now have more than 70 banking subscribers, while 10 insurance firms are already engaged in the Insurance KRI Study. We are also talking to a number of central banks, each of which recognizes that it has operational risks of its own and a need for indicators to monitor and measure exposures. The KRI Study for Banking proved there is consensus in where financial organizations see operational exposures, while the KRI Framework is being adopted by a wide range of firms, not just for KRIs, but also for loss data management, risk and control assessment, and scenario analysis.”
The next major objective for KRI Services is to launch KRI Benchmarking. “The top 20 ranking of indicators per product area is vital for benchmarking, as it assists the various working groups in selecting which indicators they wish to start benchmarking,” says Mike Finlay, managing director at RiskBusiness International. “It also helps individual subscribers select which indicators they should look at first. We anticipate our regional working groups to start off benchmarking about 10 to 15 indicators each, with similar volumes for the product-specific working groups. The number of indicators being benchmarked will then increase over time.”
For more information on KRI Services, please visit www.KRIeX.org.
About RMA
Founded in 1914, the Risk Management Association is a non-profit, member-driven professional association whose sole purpose is to advance the use of sound risk principles in the financial services industry. RMA promotes an enterprise approach to risk management that focuses on credit risk, market risk, and operational risk.
Headquartered in Philadelphia, Pennsylvania, RMA has 3,000 institutional members that include banks of all sizes as well as non-bank financial institutions. They are represented in the association by 16,000 risk management professionals who are chapter members in financial centers throughout North America, Europe, and Asia/Pacific. Visit RMA on the Web at www.rmahq.org.
About RiskBusiness International Limited
RiskBusiness International Limited is a risk consultancy specializing in leading operational risk management practices. It is an association of like-minded industry professionals who have the aim of furthering the risk management discipline to enable better risk-reward decision-making.
Risk management is an evolving discipline, which has developed in close partnership with the industry. RiskBusiness has, both as individuals and collectively, a depth of established relationships with leading players and regulators in the operational risk field. It is also an active participant in industry working groups and contributes thought leadership through publications and education.
RiskBusiness was founded in 2003 by Jonathan Davies and Mike Finlay. It acquired the
operational risk consultancy practice of Raging Torrents International Limited in June 2003. The registered head office is in England, with principal consultancy locations in London, New York, Hong Kong, Toronto, and Zurich. RiskBusiness consists of only seasoned industry players who have proven experience in designing, delivering, implementing, and maintaining leading risk practices. Visit RiskBusiness on the Web at
www.riskbusiness.com.
Contact Information
RMA:
Charles Taylor
Director of Operational Risk
ctaylor@rmahq.org +1 215 446 4126
RiskBusiness International Limited:
Mike Finlay
Managing Director
mike.finlay@riskbusiness.com +44 7721 969224