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Key Risk Indicators (KRIs)

KRIs

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Herbert Ngwarai
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51 views10 pages

Key Risk Indicators (KRIs)

KRIs

Uploaded by

Herbert Ngwarai
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Key Risk Indicators

(KRIs)
Measuring and monitoring risks before they become
losses.
What are KRIs?
KRIs are early warning signals that help organizations
identify increasing risk exposure. Think of them as
"health check" metrics for risk management.
Why are KRIs Important?
Provide early alerts

Support proactive decision-making

Help track risk trends over time

Strengthen overall risk culture


Features of a Good KRI

Measurable

Easy to track

Forward-looking

Linked to specific risks


Example 3 Operational
Risk ¿

High number of failed transactions or system


downtime = Higher operational risk.
Example 3 Credit Risk
û

Rising overdue payments or defaults in loan portfolio


= Warning signal for credit losses.
Example 3 Market Risk


Sudden spike in portfolio volatility or VaR breaches =


Market instability risk.
Example 3 Cybersecurity
Risk Z

Increasing phishing attempts or system breaches =


Higher cyber risk exposure.
KRI vs KPI 

KPI KRI
Measures performance Measures risk (e.g.,
(e.g., revenue growth) number of fraud cases
detected)
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