Okuzeka
Finance & Banking vocabulary · Risk Management

Risk assessment

Meaning in finance & banking, with examples

nounCommon term

In finance & banking, risk assessment means: The process of identifying possible risks, estimating how likely they are and how much harm they could cause, and deciding how to manage them.

In Turkish: risk değerlendirmesi

How it is used

Used across credit, compliance, operations and IT. Teams carry out or conduct a risk assessment, for example before launching a product. AML rules require a customer risk assessment that classifies clients as low, medium or high risk. Results are often shown in a risk matrix of likelihood and impact.

Example sentences

  1. We need a risk assessment before we launch the new payment product.

  2. The customer risk assessment placed the company in the high-risk category.

Common collocations

  • carry out a risk assessment
  • customer risk assessment
  • risk assessment framework
  • risk matrix
  • mitigateTo make a risk, loss or problem less serious or less likely, without removing it completely.
  • risk appetiteThe amount and type of risk an organisation is willing to accept in pursuit of its goals, usually approved by the board and expressed as limits.
  • operational riskThe risk of loss from failed internal processes, human error, system breakdowns or outside events such as fraud, cyberattacks or natural disasters.
  • AMLShort for anti-money laundering: the laws, controls and procedures that banks use to prevent, detect and report money laundering.
  • credit riskThe risk that a borrower or another party will not pay back money it owes on time or in full, causing a loss for the lender.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Risk Management

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This page explains English vocabulary for learners. It is not financial advice.