What do Key Risk Indicators (KRIs) measure?

Key Risk Indicators (KRIs) are metrics used specifically to measure the level of risk within an organization. They provide valuable insights into the likelihood of adverse events occurring that could impact an organization’s objectives, thereby allowing for proactive risk management. Organizations establish KRIs to monitor risk exposure in various areas, including financial, operational, compliance, and strategic risks. By tracking these indicators over time, businesses can identify trends that may signal a heightened risk and take necessary precautions to mitigate potential issues before they escalate.

In contrast, options related to system performance, operational efficiency, and user satisfaction focus on different aspects of organizational metrics that do not directly relate to measuring risk levels. System performance assesses how well IT systems operate, operational efficiency deals with how effectively processes are carried out, and user satisfaction reflects user contentment with services or products. While all these areas are important for overall organizational health, they do not fall under the scope of KRIs, which are specifically centered on identifying and quantifying risk.