AI Glossary
Risk Assessment
The process of identifying potential risks and evaluating their likelihood and potential impact.
Risk Assessment
Overview
Every important decision involves some level of uncertainty.
Organizations reduce uncertainty by performing risk assessments.
A risk assessment is the process of identifying potential risks, estimating how likely they are to occur, and evaluating their possible impact.
A helpful way to think about a risk assessment is planning an outdoor event.
Before the event begins, organizers consider weather forecasts, equipment failures, safety concerns, and emergency procedures.
They prepare for potential issues before they occur.
Organizations follow a similar approach when implementing AI systems.
Risk assessments may examine security threats, privacy concerns, regulatory obligations, operational failures, model bias, and business impacts.
The results help organizations prioritize resources and determine where additional safeguards may be needed.
Risk assessments are a foundational component of AI governance and responsible AI adoption.
Why It Matters
Risk assessments help organizations make informed decisions before deploying AI systems.
Real-World Example
A healthcare provider evaluates an AI diagnostic tool for accuracy, privacy, fairness, and regulatory compliance before deployment.