About

This workshop is aimed at risk practitioners and business managers who have or are looking to implement a robust key risk indicator (KRI) programme within their organisation. The workshop covers all aspects of setting up, developing and running a KRI programme that can be used both as an essential component of the Risk Management Framework, and as a powerful tool to assist management in the day-to-day control of their business. The course is hands-on and involves case studies to reinforce concepts covered in a practical workshop environment.

Key Learning Outcomes
•    An in-depth understanding of the objectives of the KRI process and what an effective KRI process entails;
•    An understanding of how KRIs fit into the risk management framework;
•    The ability to design, develop and implement an effective group of relevant KRIs;
•    An understanding of the various types of KRIs and how to categorise them;
•    The ability to design an efficient and effective KRI process from collection to reporting;
•    The ability to scale KRIs and reflect risk appetite and tolerance in the KRI process;
•    The knowledge to aggregate KRIs to produce more relevant and informative risk measures;
•    The ability to report KRIs in a meaningful way;
•    How to use KRIs in a risk and general management context;
•    An appreciation of the system requirements and the pitfalls of establishing KRIs;
•    The skills to be able to carry out KRI workshops with management teams; and
•    Understand external regulatory requirements for using KRIs (Basel, RBNZ and APRA).

Who Should Attend?
•    Group Operational Risk
•    Risk Officers
•    Risk Managers
•    Financial Controllers
•    Internal auditors
•    External Auditors
•    Risk Advisers and Consultants
•    Fraud Managers
•    IT Security and Operations staff.

Training Methodology
This intensive 1-day master class will combine tutorial sessions and case studies with interactive learning exercises. All attendees will be provided with a workbook and a certificate of completion.


Outline

Current status of Operational Risk Management
•    The past and the present
•    The risk management challenge
•    Organisation structure and three lines of defence
•    The components of an operational risk management (ORM) framework
•    Applying KRIs within the risk framework

Regulatory Drivers
•    The Basel II requirements (and Basel III)
•    Meeting RBNZ’s and APRA expectations

Defining KRIs
•    What is a KRI?
•    Distinguishing between KRIs, KCIs and KPIs
•    What is the objective of KRIs?
•    How are operational risk KRIs different market, credit, and liquidity risk measures?

Identifying KRIs
•    Identify your key risks and key controls
•    Align KRIs to those risk components that matter: causes, events, controls
•    Identify KRIs that measure those risks
•    Examples of KRIs
•    What are the different types of KRIs
•    Lagging versus leading KRIs
•    Raw KRIs versus composite KRIs
•    Qualitative versus quantitative KRIs

Class Activity 1: Mix and match

A KRI library
•    Purpose of a KRI library
•    Contents of a KRI library
•    Using and maintaining a KRI library

Ranking KRIs
•    How robust is the KRI?
•    Are they leading or lagging?
•    Ease of use and collection of data
•    Quality of historical data sets
•    Aggregating (smart) KRIs
•    Case Study: Ranking KRIs

The KRI Process
•    Identifying and collecting KRIs
•    Sourcing and validating KRIs
•    Linking KRIs to risks and controls
•    Establishing thresholds and tolerance levels
•    Monitoring and reporting of KRI data
•    Quality assurance surrounding KRI data

Reporting of KRIs
•    Objective of KRI reporting
•    Types of reports:
•    Traffic light
•    Trend Setter
•    Benchmark Scatter

Using KRIs
•    As a risk and control monitoring tool?
•    As a feedback and incentive tool
•    As a management tool
•    As an input into the risk assessment process
•    As a benchmarking tool

The future of KRIs
•    Where to next?
•    Maximising value from the KRI process
•    Main pitfalls to be aware of
•    The keys to KRI success


Facilitator

Paul Barton

Paul is principal and principal trainer of RiskHub Limited. Paul has experience in all facets of risk management with particular specialisation in Operational Risk Management. Prior to setting up RiskHub, Paul has spent nearly 16 years working in a risk management capacity both here and in Australia. Paul has extensive financial services experience where he headed up the risk and compliance functions across superannuation, wrap platforms, and insurance for BT Financial Group in Sydney. Most recently Paul has led the operational risk function at ANZ Bank in Wellington.



Paul Barton is also facilitating:

• Operational Risk Management for Financial Institutions
• Risk and Control Assessment for the Financial Sector

In-house Training