Question 151 - CISM discussion

Key risk indicators (KRIs) are metrics that measure the level of risk exposure and the likelihood of occurrence of potential adverse events that can affect the organization's objectives and performance. KRIs are used to monitor changes in the risk environment and to provide early warning signals for potential issues that may require management attention or intervention.KRIs are also used to communicate the risk status and trends to the relevant stakeholders and to support risk-based decision making12.

The primary reason to monitor KRIs related to information security is to alert on unacceptable risk. Unacceptable risk is the level of risk that exceeds the organization's risk appetite, tolerance, or threshold, and that poses a significant threat to the organization's assets, operations, reputation, or compliance. Unacceptable risk can result from internal or external factors, such as cyberattacks, data breaches, system failures, human errors, fraud, natural disasters, or regulatory changes.Unacceptable risk can have severe consequences for the organization, such as financial losses, legal liabilities, operational disruptions, customer dissatisfaction, or reputational damage12.

By monitoring KRIs related to information security, the organization can identify and assess the sources, causes, and impacts of unacceptable risk, and take timely and appropriate actions to mitigate, transfer, avoid, or accept the risk. Monitoring KRIs can also help the organization to evaluate the effectiveness and efficiency of the existing information security controls, policies, and procedures, and to identify and implement any necessary improvements or enhancements.Monitoring KRIs can also help the organization to align its information security strategy and objectives with its business strategy and objectives, and to ensure compliance with the relevant laws, regulations, standards, and best practices12.

While monitoring KRIs related to information security can also serve other purposes, such as identifying residual risk, reassessing risk appetite, or benchmarking control performance, these are not the primary reason for monitoring KRIs. Residual risk is the level of risk that remains after applying the risk treatment options, and it should be within the organization's risk appetite, tolerance, or threshold. Reassessing risk appetite is the process of reviewing and adjusting the amount and type of risk that the organization is willing to take in pursuit of its objectives, and it should be done periodically or when there are significant changes in the internal or external environment.Benchmarking control performance is the process of comparing the organization's information security controls with those of other organizations or industry standards, and it should be done to identify and adopt the best practices or to demonstrate compliance12.Reference=Integrating KRIs and KPIs for Effective Technology Risk Management,The Power of KRIs in Enterprise Risk Management (ERM) - Metricstream,What Is a Key Risk Indicator? With Characteristics and Tips,KRI Framework for Operational Risk Management | Workiva,Key risk indicator - Wikipedia