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Governance & Policy

Risk Assessment Framework

Systematically identify, evaluate, and mitigate AI-related risks across your organization. Protect against security breaches, compliance violations, and operational failures.

What Is a Risk Assessment Framework?

An AI risk assessment framework is a structured approach to identifying, analyzing, and mitigating risks associated with AI adoption and deployment. It helps organizations proactively address potential issues before they become problems.

This framework covers technical risks (security, reliability), operational risks (process failures, vendor dependencies), compliance risks (regulatory violations), and strategic risks (competitive disadvantage, reputation damage).

Why It Matters

Prevents Costly Incidents

Proactive risk assessment identifies issues before they result in data breaches, compliance fines, or operational disruptions.

Enables Informed Decision-Making

Leadership can make better AI investment decisions when they understand the risk profile of different projects.

Ensures Regulatory Compliance

Many regulations require documented risk assessments for AI systems, especially in regulated industries.

Builds Stakeholder Confidence

Investors, customers, and partners trust organizations that demonstrate mature risk management practices.

Key Risk Categories for AI

Security Risks

  • • Data breaches through AI tools accessing sensitive information
  • • Prompt injection attacks manipulating AI outputs
  • • Model theft or reverse engineering
  • • Unauthorized access to AI systems

Compliance & Legal Risks

  • • Violating data privacy regulations (GDPR, CCPA)
  • • Non-compliance with industry regulations
  • • Intellectual property infringement
  • • Contract violations with clients or vendors

Operational Risks

  • • AI system downtime or performance degradation
  • • Vendor lock-in or dependency on single provider
  • • Inadequate training leading to misuse
  • • Integration failures with existing systems

Ethical & Reputational Risks

  • • Biased AI decisions causing discrimination
  • • Loss of customer trust due to AI missteps
  • • Negative media coverage of AI incidents
  • • Employee resistance or morale issues

Risk Assessment Process

1

Identify Risks

Catalog potential risks across all AI initiatives. Include technical, operational, compliance, and strategic risks.

2

Assess Likelihood & Impact

Rate each risk on probability of occurrence and potential impact (low, medium, high, critical).

3

Prioritize Risks

Create a risk matrix to prioritize which risks require immediate attention vs. long-term monitoring.

4

Develop Mitigation Strategies

For each high-priority risk, define controls, safeguards, and response plans.

5

Monitor & Review

Continuously monitor risk indicators and reassess as AI landscape evolves.

Maturity Levels

Not Started / Planning

No formal risk assessment process. AI risks addressed reactively when incidents occur.

In Progress / Partial

Basic risk identification for major AI projects. Informal assessment without standardized framework or documentation.

Mature / Complete

Comprehensive risk assessment framework applied to all AI initiatives. Regular reviews, documented mitigation strategies, and continuous monitoring.

How to Get Started

  1. 1.
    Assemble Risk Team: Include IT security, legal, compliance, and business stakeholders.
  2. 2.
    Inventory AI Systems: Create a complete list of all AI tools and projects in use or planned.
  3. 3.
    Conduct Initial Assessment: Use a simple risk matrix to evaluate each AI system.
  4. 4.
    Document Findings: Create a risk register with likelihood, impact, and mitigation plans.
  5. 5.
    Establish Review Cadence: Quarterly reviews for high-risk items, annual comprehensive assessment.

Need Help Establishing AI Risk Management?

Get expert guidance on building a comprehensive AI risk assessment framework tailored to your organization.