Risk Management is the name given to a logical and systematic method of identifying, analyzing, treating and monitoring the risks involved in any activity or process.
Risk is an inbuilt part of all human activities so, not surprisingly, assessing risk and making decisions about how to avoid or mitigate it are activities fundamental to human existence. Whether evaluating whether to walk down an unfamiliar place at night or undergo a medical procedure, the process of assessing and managing risk is so fundamental and embedded that individuals do it automatically and often without any conscious awareness.
In Current era , Post implementing information technologies in any organizations the processed and unprocessed Data is subject to various kinds of potential risks. Explores the environment of IT in organizations, identifies the probable threats, and proposes a standard framework for data protection and risk management. The risk management process has four major components ‐‐ risk identification, risk analysis, risk‐reducing measures, and risk monitoring. Data protection totally trusted over risk management as a critical tool for complying with data protection laws and ensuring that data are processed appropriately and the fundamental rights and interests of individuals are protected effectively. Yet these risk management processes, whether undertaken by businesses or regulators, have often been informal, unstructured and failed to take advantage of many of the widely accepted principles and tools of risk management in other areas. due to the increasing costs associated with protecting and maintaining data, a holistic approach to data risk management is becoming essential to organizations. ... Effective data risk management requires processes and procedures to coordinate the effort across the entire organization. Comprehensive Risk Management Program can be used to guide organizations in reducing the losses resulting from the realization of threats to IT use
In recent years, many countries have enacted laws and regulations requiring or encouraging more formal risk management. Today formal, documented risk assessments and other risk management tools are required in an expansive range of laws ranging from workplace safety to financial reporting. Along with these legal requirements has come a professional practice of risk management, including specialized research, international and sectoral standards, a common vocabulary and agreed-upon principles and processes.
Steps for Risk Management
1) Identify possible risks; recognize what can go wrong
2) Analyze each risk to estimate the probability that it will occur and the impact (i.e., damage) that it will do if it does occur
3) Rank the risks by probability and impact
- Impact may be negligible, marginal, critical, and catastrophic
4) Develop a contingency plan to manage those risks having high probability and high impact
The strategic and organisational context in which risk management will take place.
For example, the nature of your business, the risks inherent in your business and your priorities.
Risk Management in Customs
Customs administrations have turned increasingly to Risk Management as an effective means of meeting national objectives.
Administrations provide facilitation while maintaining control over the international movement of goods and persons.
Risk management helps in matching Customs priorities to resources.
International Organisations encourage and support the adoption of modern Customs control techniques, using Risk Management principles.
Why you should use Risk Management
- Economic benefits, by facilitating the movement of goods, ships, aircraft and people – when rated low risk.
- Makes more effective use of existing skills and experience – giving better results.
- Improves the quality of Customs controls – information and accountability.
- The process helps Administrations focus on priorities and in decisions on deploying limited resources to deal with the highest risks.
Responsibilities must be allocated
- Appoint a Risk Management champion with appropriate qualifications, including experience and analytical skills.
- Form a Risk Management Committee, representative of operational areas.
- Conduct Risk Management Workshops.
- Determine operating procedures.
The presence of an active risk-management program says something about your organization’s brand. Employees have knowledge of expectations and leadership from the start of their employment, while your business develops a reputation as thorough and professional. You build and support strategic planning through development of your program, and you establish a standard to which you can evaluate performance and adapt to changing needs. When you anticipate risk, your preparation begins, and the shock of the unexpected is dissipated.
‘Risk’ is dynamic and subject to constant change, so the process includes continuing: Monitoring and review and Communication & consultation
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