Explain the four risk categories and provide
three examples of each.
Answers
Answer:
The main four types of risk are:
>strategic risk - eg,(i) Liability Risk,(ii)Marketing Risk,(iii)Change Management.
>compliance and regulatory risk - eg(i)increase the costs of running a business,(ii)change the competitive landscape,(iii)reduce the attractiveness of an investment.
>financial risk - eg(i)Liquidity risk,(ii)Funding risk,(iii)Foreign exchange risk
>operational risk - eg(i)Risks arising from catastrophic events (e.g., hurricanes)(ii)Computer hacking,(iii)Internal and external fraud.
These categories of risks are not rigid and some parts of your business may fall into more than one category. The risks attached to data protection, for example, could be considered when reviewing both your operations and your business' compliance.