Friday, October 30, 2020

3 Risk Categories Risk Advisors Might Consider

Business owners often employ consulting services like the one run by Declan Kelly to advise them on management, capital, strategy, and communications. Some consulting companies like the one managed by Founder Declan Kelly even offer risk management advisory services. 

Businesses are subject to many risks, and anticipating and planning for them can help minimize future difficulties. Here are three categories risk advisors might look at when performing risk assessments. 

1. Cyber and Physical Security Risk

Cyber risks in business include hacking, viruses, cloud vulnerabilities, mobile security threats, and more. Because the information in the modern world is often stored and transferred online, there is a high risk of confidential information being stolen or leaked. 

Businesses are also vulnerable to social engineering, where employees and associates are manipulated through false social interactions into revealing company secrets. Social engineering is also a physical security risk, along with document theft, identification theft, and other forms of theft. 

There are also cyber-physical security systems that are designed to utilize cyber elements like sensing and computation to interact with physical elements like humans and pose a serious threat.

2. Economic and Financial Risk

Risk advisement might also include economic and financial risk aspects. These are not the same. Economic risk is dependent on the economy and its ups and downs. Financial risk comes from a business's own finance-related business dealings such as loaning money, interest fluctuations, and company debt which can harm a business's cash flow. 

3. Political and Reputation Risk

There is also risk associated with both the political and reputation areas. When considering political risks, advisors take into account the world's political climate and general view towards international trade and how that can affect business. Reputation risk takes into account how damage to the company's reputation can lead to a loss of trust, profits, investors, and customers.

There are, of course, other risks to consider. However, these are some of the bigger risks to assess and plan for in business. Being ready for such risks can help a company avoid disaster.

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