What is a key risk indicator (KRI)?

A key risk indicator (KRI) is fundamentally designed to act as a measurable value that provides insights into potential risks that could affect an organization’s objectives significantly. Specifically, option B highlights that a KRI is a subset of risk indicators that possesses a high predictive capability. This means that KRIs are selected for their ability to forecast changes in risk conditions, allowing organizations to anticipate potential problems and take proactive measures to mitigate those risks effectively before they escalate into actual issues.

Selecting effective KRIs is essential for risk management as they help organizations monitor risk levels in real-time and provide early warning signals. This proactive approach enables businesses to stay ahead of potential threats, ensuring that they can maintain operational stability and security.

In contrast, the other options do not accurately define a KRI. Measuring user activity might be relevant for monitoring performance or compliance, but doesn't capture the predictive nature inherent in KRIs. A statistical measure of data breaches would provide valuable information but isn’t specific to assessing risk proactively, which is a defining characteristic of KRIs. Lastly, while a software tool for managing risks may be helpful in the overall management process, it does not define what a KRI is. It is essential to understand that KRIs serve a specific role in predicting and mitigating risk