Risk classification serves a number of purposes:
- It allows the organisation to set up multi level categories of risk that can assist in reporting and enhance the understanding of the risk. So for example, once a risk category of, for example, financial has been set up it is then possible to filter and search for all risks that are financial in nature.
- Unlike traditional risk categories, it will allow for the risk class and the impact of that risk to be defined. So for example if a sub classification of Financial risk is Fraud, then that risk class can be given a definition and an impact. Both the definition and impact of Fraud can then be reported against for all specific risks assigned to that class.
- If risk classifications are built down multiple levels, it can provide your organisation with a Risk Library that can be used as a basis for specific risk assessments against business units, projects or contracts.
