ASSA follows the ISO 31000 and API 780 to provide guidance on the principles and framework for effective RM, including the identification of potential risks to systems and processes, these guidelines can help institutions identify and manage risks more effectively, thereby reducing the likelihood of negative impacts on the system or process. The process of identifying potential risks to a system or process involves the following steps:
Establishing the Context. This involves defining the scope and boundaries of the system or process, as well as identifying the stakeholders and their interests. This step helps to ensure that the risk identification process is focused and relevant.
Identifying the Risks. This involves identifying all possible internal and external threats that could affect the system or process. This will be done through brainstorming sessions, surveys, interviews, historical data analysis, and other techniques.
Analysing the Risks. This involves evaluating the identified risks in terms of their likelihood and potential impact. This step helps to prioritize the risks and determine which ones require further attention.
Evaluating the Risks. This involves assessing the risks in terms of the institution's risk tolerance and appetite. This step helps to determine whether the risks are acceptable or whether additional risk mitigation measures are needed.
Treating the Risks. This involves developing and implementing risk mitigation measures to reduce the likelihood or potential impact of the identified risks. This can include risk transfer, risk avoidance, risk reduction, or risk acceptance.
Monitoring and reviewing. This involves regularly monitoring and reviewing the effectiveness of the risk mitigation measures and the overall RM process. This step helps to identify any new risks that may arise and ensure that the RM process remains effective and relevant.
The risk analysis will involve the following steps:
Identifying the potential consequences of each risk. This step involves determining the various ways in which the risk could impact the installation, institution or project.
Assess the likelihood of each risk. Once the potential consequences of each risk have been identified, the next step will be to assess the likelihood of each risk occurring. This step involves evaluating the probability of the risk eventuating.
Determine the impact of each risk. After assessing the likelihood of each risk, the next step will be to determine the impact of each risk. This step involves evaluating the severity of the consequences of the risk if it were to occur.
Prioritize risks. Once the potential consequences, likelihood, and impact of each risk have been determined, the next step will be to prioritize the risks. This step involves ranking the risks based on their potential consequences and likelihood, and determining which risks pose the greatest threat to the institution or project.
Develop risk treatment options. After prioritizing the risks, the next step will be to develop risk treatment options. This step involves identifying strategies and measures that can be implemented to mitigate, transfer, or accept the risks.
Review and monitor risks. Finally, it is important to review and monitor the risks on an ongoing basis. This step involves continuously assessing the effectiveness of the risk treatment options and adjusting them as necessary. It is also important to identify new risks that may emerge over time and incorporate them into the RM framework.
Evaluating risks based on the analysis will involve identifying and prioritizing risks, assessing the level of risk tolerance, developing risk mitigation measures, implementing these measures, and continuously monitoring and reviewing the RM process. The following steps are generally recommended by ASSA:
Identify and prioritize risks. This involves identifying potential risks and prioritizing them based on their likelihood and potential impact. The risks will be categorized based on their severity, likelihood of occurrence, and potential consequences.
Assess the level of risk tolerance. Determine the institution's level of risk tolerance based on its RM objectives and the consequences of the identified risks. The institution should decide which risks to accept, which to transfer or mitigate, and which to avoid.
Develop risk mitigation measures. Develop strategies to reduce or eliminate risks that exceed the institution's risk tolerance. These measures may include risk avoidance, risk transfer, risk reduction, and risk acceptance.
Implement risk mitigation measures. Implement the selected risk mitigation