What function do key risk indicators (KRIs) serve in an organization?

Key risk indicators (KRIs) serve a crucial role in risk management by providing early warning signals of increasing risk exposure within an organization. This proactive approach allows organizations to identify potential risks before they escalate into significant issues, enabling timely interventions or adjustments to risk management strategies.

Using KRIs helps organizations monitor trends and changes in risk profiles, thereby fostering a culture of awareness and responsiveness. By analyzing these indicators, organizations can effectively anticipate potential threats and take preventive measures, ensuring a more resilient risk management framework.

The other options focus on specific aspects of risk management but do not capture the primary function of KRIs. For instance, determining financial benefits is more about evaluating the outcomes of risk strategies rather than the early identification of risks. Ranking risks based on severity involves prioritization but doesn't address the monitoring aspect of risks over time, while ensuring compliance is related to legal frameworks rather than the dynamic nature of risk assessment that KRIs support.