Business KPIs Based on Compliance Risk Estimation
The issue of KPI selection is urgent for sustainable business organization including the financial sector. There are numerous studies devoted to KPIs; however, the European Central Bank (European Central Bank, 2023) insists on the necessity of revising the methodology to improve it and make it based on risk and behavior aspects. This research is an attempt to meet the new vision of the ECB. The authors develop a new approach to the selected KPIs of financial institutions on the basis of risk indicators. The PLS-SEM method was used to construct and test the model, representing the company's compliance function and considering various risk categories. The significant relationship between compliance procedures and risk factors was confirmed by the constructed model. The study results not only meet the ECB's new approach but also contribute to the scientific area of choosing sustainable indicators for sustainable business. Empirical analyses from the study decisively highlighted a pronounced correlation between strict compliance with the established rules and proficient risk management practices. In tandem with the ECB's guiding principles, the conclusions derived from this research not only complement the existing body of knowledge but also offer a novel perspective on the essence of the KPI selection. Conclusively, this research confirms the significance of risk-aware KPIs in guiding financial entities toward a trajectory of sustained excellence and growth.
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Journal of Tourism and Services (ISSN 1804-5650) is published by the Center for International Scientific Research of VŠO and VŠPP in cooperation with the following partners:
- University College of Business in Prague, Czech Republic
- University of Entrepreneurship and Law, Prague, Czech Republic
- School of Business and Administration of the Polytechnic Institute of Setúbal, Portugal
- Faculty of Operation and Economics of Transport and Communications, University of Zilina, Slovakia
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