What type of risk assessment focuses on identifying the potential impact of a risk?

A qualitative risk assessment is designed to identify and evaluate the potential impact and likelihood of various risks in a more subjective manner. It often involves gathering input from various stakeholders to prioritize risks based on their potential effects, utilizing descriptions rather than numerical data. This type of assessment typically results in a ranking or categorization of risks, providing insights into which risks could have the most significant impact on the organization’s objectives, reputation, or compliance obligations.

By contrast, quantitative risk assessments take a more data-driven approach, often assigning numerical values to risk probabilities and impacts, allowing for a calculated expression of risk in monetary terms. While technical and operational risk assessments might focus on specific factors or aspects of risk related to technology or business processes, respectively, they do not inherently center on the broad identification of potential impacts, which is the key focus of qualitative assessments. This makes qualitative risk assessment the best fit for understanding potential impacts in a holistic or strategic context.