One of the key questions financial services firms ask every morning is, “Am I riskier today than I was yesterday?” Institutions need to know whether their risk profile has changed, and why. In such a highly competitive industry and a constantly evolving economic environment, knowing how and why their risk profile is changing – or is about to change – is a significant advantage because it can enable them to capitalize on potential business opportunities or to mitigate risk. Having a holistic, real-time view of risk also helps firms meet the heightened expectations of regulatory agencies across the globe.
The Protiviti Risk Index™ is an innovative technology tool and corresponding methodology that can enable firms to confidently assess their risk exposure. It is simple and scalable and can be as real time as the data is available. This powerful solution is designed to capture, calculate and assist management in evaluating a large volume of complex risk measures and streamline them to a single-number snapshot.
The methodology, designed to then allow risk managers, stakeholders and executive management to drill down into risk to understand the drivers and ultimately take action, is strategic because it is designed and focused on the most important risk measures linked to the organization’s strategies, goals and business objectives.
The solution can be designed at an enterprise level, a divisional level or an individual business-unit level, or within specific geographic regions, or to solve a specific business problem like measuring data quality or levels of model risk. Because the tool is highly customizable, leading indicators and risk measures can be displayed to present the firm’s risk exposure in different ways.
The Protiviti Risk Index™ has been designed to allow users to drill down into core components derived from principal or material risks and specific measures or indicators (qualitative and quantitative) aligned to the firm’s strategy. As an added value, Protiviti has as an accelerant a library of best-in-class metrics and measures derived from its experience, a mix of leading and lagging measurement indicators that can be used within any customized index.
A highly engaging, user-friendly tool, The Protiviti Risk Index™ utilizes intuitive data visualization software that allows the dashboard to be customized to a particular user, who gains access via computer or mobile devices using a mouse or touchscreen technology. It scales readily from phone to tablet to laptop and desktop.
Supporting a multitude of platforms and programs, including risk appetite, board and executive risk reporting, The Protiviti Risk Index™ is also aligned with many of the key principles from the Basel Committee on Banking Supervision’s guidance on risk data aggregation, BCBS 239, which was designed with the goal of strengthening firms’ risk data aggregation capabilities and risk reporting capabilities.
Firms gain valuable insights from using The Protiviti Risk Index™, as it efficiently focuses attention on the highest-priority items in an intuitive and straightforward manner while proactively addressing key risk management issues – a much-needed advantage in this crowded and fast-changing marketplace.