This is part 4 of our video series on "Disparate and Disconnected Risk Processes and Information". In this video, David Tattam talks about key risk indicators how risk metrics can be used to help create an integrated view of your risks.
Hi, I'm David Tattam, Director of Research and Training at the Protecht Group. This is the next in the series of business risk videos. And today we're going to be talking about key risk indicators or risk metrics. For the other videos, check out the links below.
So what exactly are risk metrics? They're really measurable elements, measurable evidence of risk controls as risk and controls operate, develop through the business. It's like thinking that when risk develops, it gives off puffs of smoke, red flags and we're looking out for what are those pieces of information that we can collect and get intelligence from.
What's their purpose, primarily an early warning signal. And the sooner we can get that information, the quicker we can act. And secondly, as part of that, it makes our risk management reporting information more real time.
So what are the bits of the processes around creating great metrics?
Author of 'A Short Guide to Operational Risk', David Tattam is an internationally recognised specialist in all facets of risk management, particularly at the enterprise level. His career includes many years working with PwC, as well as two Australian banks. His achievements include the creation of the Middle Office (Risk Management Department) for The Industrial Bank of Japan in Australia and the complete implementation of all Australian operations, systems, procedures and controls for Westdeutsche Landesbank (WestLB).