What are Key Risk Indicators (KRIs) in ORM?

Key Risk Indicators (KRIs) are essential tools within Operational Risk Management as they provide metrics that signify the potential for increasing risk exposure within an organization. These indicators serve as early warning signs, helping organizations identify trends and anticipate potential issues before they manifest into significant problems. By monitoring KRIs, management can gain insights into various risk factors and make informed decisions to mitigate those risks effectively. KRIs can involve various dimensions of risk, such as operational failures, compliance lapses, and environmental changes, which makes them crucial for proactive risk management strategies.

The other options, while related to aspects of risk management, do not accurately describe the function of KRIs. Financial parameters that guide investment decisions do not encompass the broad scope of risk exposure that KRIs cover. Templates for risk management plans refer to structured documents rather than metrics, and statistical analyses of past operational incidents focus on retrospective evaluations rather than predictive indicators, which is the core function of KRIs. Thus, option B correctly captures the essence of what Key Risk Indicators represent in the context of Operational Risk Management.