What is residual risk?

Residual risk is defined as the level of risk that remains after implementing security controls to reduce or mitigate the initial risk. In the risk management process, organizations assess potential risks and then apply controls, such as policies, procedures, and technical measures, to reduce these risks to an acceptable level. However, it is important to acknowledge that not all risks can be eliminated completely; some risks will persist even after controls are in place. This remaining risk is referred to as residual risk.

Understanding residual risk is crucial for organizations as it helps them determine how much risk they are willing to accept and informs ongoing risk management decisions. It also assists in prioritizing security measures and allocating resources effectively to address the most significant remaining risks.