Risk assessment definition
Risk assessment is the process of identifying, analyzing, and evaluating potential risks that may arise from the use of technology or the implementation of tech solutions in a particular context. The goal of risk assessments is to understand the likelihood and potential impact of a particular event occurring and to determine appropriate strategies for mitigating or managing those risks.
See also: key risk indicator
Risk assessment typically involves these steps:
- Identify the potential risks. This involves finding and identifying all the possible risks that could arise from the use of technology in a particular context.
- Analyze the risks. Once potential risks have been identified, they must be analyzed to determine the likelihood and potential impact of each risk event.
- Evaluate the risks. Based on the analysis, the risks are evaluated to determine which of them are most critical and require immediate attention.
- Develop risk management strategies. After evaluation, appropriate management strategies are developed to mitigate or manage the risks.
- Monitor and review. Risk assessment is an ongoing process, and risks must be continuously monitored and reviewed to ensure that the management strategies remain effective and up-to-date.
What kinds of risks are usually assessed?
- Cybersecurity risks: hacking, phishing attacks, malware infections, and other types of cyber attacks.
- Data privacy risks: unauthorized access, theft, or loss of credit card, medical, and other types of personal data.
- Regulatory compliance risks: failure to comply with GDPR, HIPAA, or CCPA.
- Business continuity risks: major disruptions, like a natural disaster or a cyber attack.
- Financial risks: the cost of recovering from a cyber attack or the loss of revenue due to a system failure.
- Reputational risks: negative publicity or damage to brand image due to a data breach or other type of security incident.
- Human risks: human error or intentional misconduct by employees, which can result in security incidents or other types of operational failures.