Protiviti and RiskBusiness integrate risk technologies for Basel II

Source: Protiviti

In a move to help financial institutions and other organizations identify, manage and ultimately reduce operational risks and exposure related to Basel II and other regulatory compliance activities, Protiviti Inc., a leading risk consulting firm, has signed a technology agreement with RiskBusiness International Limited, the risk consultancy responsible for developing Key Risk Indicators (KRIs) for the financial services and other industries

Protiviti has enhanced its Operational Risk Management (ORM) Portal with a feature set of key risk indicators that will provide clients with the capability to identify, measure, monitor and report on prioritized risks, and track performance of business processes and related controls. The technology agreement combines the ORM Portal's powerful and uniquely flexible key risk indicator feature-set with access to the KRIeX deep library of content to enable organizations to more effectively measure and ultimately benchmark key risk indicators.

These new capabilities will enhance the holistic view of critical enterprisewide risks with specific business and functional risk indicators and enable organizations to manage key risks more proactively. In addition to helping financial institutions comply with the operational risk requirements of the Basel II Accord, the enhanced ORM Portal v2.1 will support nonfinancial clients' Sarbanes-Oxley compliance and enterprise risk management efforts through ongoing monitoring of business processes, controls and performance.

"We're pleased to offer a complete solution that addresses operational risk, facilitates a sustainable Sarbanes-Oxley compliance program and supports our clients' progress toward achieving their enterprise risk management goals," said Scott Gracyalny, Protiviti managing director and leader of the company's risk technology solutions. "Combined with our advisory consulting services, we deliver a solution that will help our clients drive performance toward business objectives, manage their associated risks, and monitor control effectiveness."

The new key risk indicator feature-set in Protiviti's ORM Portal v2.1 will enable clients to:

  • Establish key risk indicator content through a central library
  • Import key risk indicators directly from the library
  • Set thresholds
  • Measure indicator values and performance levels
  • Monitor threshold variances through notifications and escalation
  • Report on key risk indicators

Additionally, key risk indicator measurements can be tracked and managed by client-specific criteria as well as standard industry definitions to enable reporting in client-specific context while supporting future benchmarking exercises.

"Integrating the KRI Library's content with our ORM Portal combines our robust application with an industry-leading source for key risk indicators," said Gracyalny. "For our clients, this means we can better help them achieve sustainable, repeatable and cost-effective compliance and risk management programs."

"Protiviti's support for the KRI Library will deliver direct value-add to their client-base," said Mike Finlay, managing director at RiskBusiness International. "As more banks and insurance firms recognize the value of standardized indicators and the benefits of benchmarking their own indicator values against their peers, the online access and reporting functionality provided by the ORM Portal will be a crucial differentiating factor to KRI Library subscribers."

Protiviti's ORM Portal was first released in the summer of 2005. The enhanced ORM Portal v2.1, featuring the new key risk indicator functionality with direct access to RiskBusiness' KRIeX library, will be available to Protiviti clients in March 2006.

Protiviti developed its ORM Portal to assist companies in minimizing losses from operational risk by increasing visibility into operational risk exposures through the tracking of actual, estimated, near-miss or external losses seamlessly integrated with forward-thinking risk and control self- assessment, and now, key risk indicator monitoring. This information provides senior management with a basis for modeling and estimating potential losses that drive capital requirements to support decisions on appropriate risk- adjusted returns on capital deployed.

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