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What Is a Security Risk?

By G. Wiesen
Updated May 16, 2024
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A security risk in business generally indicates some form of financial risk to a company. This typically includes risks to customers as well as the business itself, as customers exposed to risks or lost money are not likely to remain loyal. A security risk to a company may involve malicious attacks or theft, which typically include both physical and digital threats.

Often associated with risk analysis, a security risk is typically a malicious attack against a company or business. Many of these risks can be identified and dealt with through preventive efforts that keep harmful attacks or mistakes from ever occurring. Responsive actions can also be used to handle a security risk, however, as some issues can arise regardless of preparation and should be handled quickly and effectively to reduce the impact of such issues.

A digital or information security risk can be a major concern for many companies that utilize computers for business or record keeping. These types of risks often involve malicious attacks against a company through viruses, hacking, and other means. Proper installation and updating of antivirus programs to protect systems against malware, encryption of private information, and securing wireless networks are all forms of preventive risk assessment and protection of information. Responsive actions against a digital security risk can include eliminating malware from a system, detecting attacks and counteracting them, and notifying law enforcement about such attacks.

There are also more traditional forms of attack or loss that can constitute a security risk. Theft, for example, continues to plague many retail businesses, and this can include both internal employee theft and external theft. This type of security risk is often handled through a company department focused on loss prevention (LP) and also frequently involves both preventive and responsive actions. Such risks can be avoided through background checks of potential employees, the use of security equipment such as cameras, and investigations of reported theft.

These types of security risks can also have an impact on the customers of a business. Digital or information security failures can result in private customer information being accessed by unscrupulous individuals who may then use that information in fraudulent ways. This can result in losses for customers, which may lead to losses for a business to compensate such customers and those customers ending business relations with that company. Physical theft and loss to a company often increases prices of products offered to customers, which may make it more difficult for a business to remain competitive.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
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