What does the process of risk assessment involve?

The process of risk assessment involves analyzing identified risks for their potential impact and likelihood of occurrence. This entails evaluating how likely a risk is to materialize and the consequences it would have on operations or objectives if it does. Identifying, categorizing, and quantifying risks are essential steps in this process, allowing organizations to prioritize their risk management efforts effectively.

By focusing on impact and likelihood, organizations can make informed decisions about which risks to address, how to allocate resources to mitigate those risks, and how to develop strategies for contingency planning. This structured approach is crucial for maintaining the integrity and stability of payment systems and ensuring compliance with regulations.

This process does not involve developing new technology solutions, implementing compliance measures, or merely reviewing transaction efficiency, as those activities generally come after assessing risks and determining what actions or countermeasures are necessary based on that assessment.