What is the first step in the risk assessment process?

The first step in the risk assessment process involves identifying potential risks and threats that could impact an organization. This typically includes forecasting individual loss events that may occur, as it sets the foundation for understanding what the organization is up against. By recognizing these potential loss events—such as data breaches, natural disasters, or operational failures—a company can begin to evaluate the likelihood of each event occurring and its potential impact.

This initial identification is critical because it informs subsequent steps in the risk assessment process, such as prioritizing risks, evaluating their potential consequences, and deciding how to mitigate or respond to them effectively. It essentially lays the groundwork for the overall risk management strategy. Without a clear understanding of what risks exist, the other steps—like stakeholder identification, financial analysis, or developing response plans—would lack the necessary context to be effective.