What does residual risk entail?

Residual risk refers to the level of risk that remains after security controls have been applied to mitigate the identified risks. When an organization implements various countermeasures or controls, they effectively reduce the initial risk, but it is virtually impossible to eliminate all risks entirely. The remaining risk post-implementation of these protective measures is what is considered residual risk.

This concept is crucial in risk management because it informs organizations of the potential vulnerabilities that still exist, allowing for better planning and decision-making regarding further risk mitigation efforts and allocation of resources. Understanding residual risk is essential for developing a comprehensive risk management strategy, as it acknowledges that while controls can significantly reduce risk, ongoing monitoring and action are necessary to address what remains.