Programme

Day One - Wednesday 30 August 2017

KRIs in a Risk Management Framework

Day one introduces the key steps leading to the selection and assessment of relevant indicators: concept of risk and risk drivers, definition of risk appetite and identification of key risks and controls in a line of business in financial services

09.00 Registration

9.30 Indicators in a Risk Management Framework

  • Operational risk frameworks in the financial services
  • Key implementation stages
  • Framework complete and maturity: the ORM pyramid
  • Risk identification tools
  • Risk wheel
  • Exposure and vulnerabilities
    Reversed stress testing analysis

Class discussion and exercise: Discuss the maturity of the framework and identify a few key risks in your organisation

11.00 Coffee Break

11.30 Actionable Risk Appetite

  • Industry guidance on risk appetite
  • Risk appetite, tolerance, limits
  • Risks to avoid: appetite for control
  • Risk appetite template
  • Risk appetite statements: Features and examples
  • Expressing risk appetite: capital and other benchmarks
  • Cascading risk appetite: RCSA & Indicators

Class discussion and exercises: Define a risk appetite statement for your key risks

13.00 Lunch

14.00 Indicators overview

  • KRI, KPI, KCI: definitions and uses.
  • Key risks, performance and control indicators: concepts and examples per acticit
  • KRIs: start with your top risks
  • A typology of KRIs
  • Desirable features of effective KRIs

Case studies: examples of KRIs and risk drivers per activity: HR, credit, trading, BCM, Internal Audit, etc

15.30 Coffee Break

16.00 Root Cause Analysis

  • Root cause analysis and lessons learnt from large incidents
    Cause of the cause: The benefits
  • Bow tie tool: Tracking the common failures and systematic patterns
    Treating causes over symptoms
  • Identifying causal KRIs
  • Defining an action plan

Group work: apply the bow-tie to one of your incident; share the lesssons learnt

17.30 End of Day One

Day Two - Thursday 31 August 2017

Designing and selecting effective KRIs

Day two  focuses on a practical methodology for the selection and design of preventative risk indicators. The methodology used for this exercise is documented and has been successfully applied in the past. The rest of the day is dedicated to metrics and thresholds, testing KRIs, and using indicators to influence risk culture.

09.30 Process Mapping and Control Design

  • Process mapping: highlighting risks and controls at every step
  • KCIs: assessing controls: their existence, their effectiveness.
  • Typology of controls
  • Typology of human error: The work of James Reason
  • Active and latent errors
  • Prevention by design

Group work: Delegates will work on process mapping of relevant activities and share the results with the class.

11.00 Coffee Break

11.30 Designing and Selecting Preventative KRIs Step by Step.

  • Methodology: Selecting preventative KRIs using a methodology inspired from six sigma
  • Designing indicators: Data, frequency, threshold, governance
  • Select: Find relevant metric for each root cause of event
  • Design each KRI
  • Reassess your current indicators and select appropriately

Group work: delegates will have the opportunity to apply this method and share their findings with others in a guided exercise

13.00 Lunch

14.00 Monitoring and Vaidating KRIs

  • Risk data analysis: Get a feel of the past. Identify patterns.
  • Forecastingof losses? Examples from credit risk, market risk and operational risk data.
  • Priority zones: Map your losses and your risks. Identify the high risks / high losses zones in your business.
  • Testing KRIs: Assess the validitaty of your indicators
  • Governance around risk indicators: differentiated definitions, but harmonised enforcement

Class discussion and benchmarking: KRI definition and governance in different institutions

15.30 Coffee Break

16.00 Risk Culture and Indicators

  • Key Performance Indicators and the shaping behaviour
  • Influencers other than KPIs
  • Motivate - Enable - Support - Assess and Reinforce

Class discussion/benchmarking: the influence of indicators risk culture

17.30 Close of Course

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