Key risk indicator service
PHILADELPHIA, Pennsylvania - The Risk Management Association (RMA) and RiskBusiness have entered into an agreement with enterprise risk management specialist Algorithmics to develop a joint external loss event/key risk indicator service.
The aim is to define and specify key risk indicators (KRIs) for major operational risks throughout financial institutions, the participants said jointly in April.
RMA and RiskBusiness have already developed an industry risk map that identifies the high operational risk points in a typical bank. RMA is the professional association for risk managers. RiskBusiness is a consultancy specialising in operational risk management.
The two recently completed an online KRI library, which identifies, defines, evaluates and catalogues some 1,500 indicators.
Currently, RMA and RiskBusiness are working to broaden the library and launch a benchmarking of KRIs. This, say the companies, is where Algorithmics comes in. In addition to consulting with RMA staff, the company's Algo OpVantage research team will provide information about real-life operational risk scenarios that can be discussed in RMA's key risk indicator workshops.
"We welcome the Algo OpVantage team to this important industry initiative," said Charles Taylor, RMA's director of Operational Risk. "This well respected organization brings extensive consulting and operational risk experience to our benchmarking effort. Financial institutions need to determine how well KRIs work in tracking important risks so that they can more accurately determine their operational risks."
