Predictive Key Risk Indicator Identification Process Using Quantitative Methods
First Claim
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1. A computer-assisted method comprising:
- identifying a set of key risks using a first triangulation process with risk information for an identified risk;
identifying a set of potential risk indicators associated with the identified risks using a second triangulation process;
conducting, by a risk management computer system, quantitative and statistical analysis to identify a set of statistical associations and a set of predictive relationships of the potential risk indicators and the key risks through correlation testing and regression modeling; and
selecting a set of predictive key risk indicators from the set of statistical associations and the set of predictive relationships.
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Abstract
Methods, computer-readable media, and apparatuses are disclosed for identifying predictive key risk indicators (KRIs) for organizations and/or firms through the application of specific statistical and quantitative methods that are well integrated with qualitative adjustment. An indicator is a variable with the purpose of measuring change in a phenomena or process. A risk indicator is an indicator that estimates the potential for some form of resource degradation using mathematical formulas or models. Organization/enterprise key risk indicators are an essential arsenal in the risk management framework of any firm or organization and may be required by regulatory agencies.
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Citations
25 Claims
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1. A computer-assisted method comprising:
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identifying a set of key risks using a first triangulation process with risk information for an identified risk; identifying a set of potential risk indicators associated with the identified risks using a second triangulation process; conducting, by a risk management computer system, quantitative and statistical analysis to identify a set of statistical associations and a set of predictive relationships of the potential risk indicators and the key risks through correlation testing and regression modeling; and selecting a set of predictive key risk indicators from the set of statistical associations and the set of predictive relationships. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12)
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13. An apparatus comprising:
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at least one memory; and at least one processor coupled to the at least one memory and configured to perform, based on instructions stored in the at least one memory; identifying a set of key risks using a first triangulation process with risk information for an identified risk; identifying risk indicators associated with the identified risks using a second triangulation process; pre-processing risk data to perform the quantitative and statistical analysis; conducting, by a risk management computer system, quantitative and statistical analysis to identify a set of statistical associations and a set of predictive relationships of the risk indicators and the key risks through correlation testing and regression modeling; selecting a set of predictive key risk indicators from the set of statistical associations and the set of predictive relationships; setting thresholds for the set of predictive key risk indicators; and verifying coverage for the set of predictive key risk indicators. - View Dependent Claims (14, 15, 16, 17, 18)
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19. A computer-readable storage medium storing computer-executable instructions that, when executed, cause a processor to perform a method comprising:
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identifying a set of key risks using a first triangulation process with risk information for an identified risk, wherein the first triangulation process includes risk information for the identified risk that includes;
historical losses, emerging risks, and qualitative judgment, and further wherein the historical losses are identified by a historical loss heat map;identifying risk indicators associated with the identified risks using a second triangulation process, wherein the second triangulation process includes;
obtaining monitoring metrics for each of the identified risks, using qualitative judgment to validate and narrow down the monitoring metrics and validate and narrow down the risk indicators, and performing selective causal analysis and hypothesis testing;conducting, by a risk management computer system, quantitative and statistical analysis to identify a set of statistical associations and a set of predictive relationships of the risk indicators and the key risks through correlation testing and regression modeling; and selecting a set of predictive key risk indicators from the set of statistical associations and the set of predictive relationships. - View Dependent Claims (20, 21, 22, 23, 24, 25)
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Specification