Description: Regulatory risk refers to the possibility that changes in laws and regulations may affect a business’s operations. This type of risk can arise from various sources, including new legislation, modifications to existing regulations, or the implementation of government policies that impact an organization’s operating environment. In a technological context, regulatory risk is particularly relevant, as companies must comply with regulations that protect sensitive data and ensure user privacy. Non-compliance can result in financial penalties, reputational damage, and loss of customer trust. Therefore, organizations must stay alert to regulatory changes and adapt their security and operational strategies to mitigate this risk. Effective regulatory risk management involves identifying, assessing, and prioritizing regulatory changes, as well as implementing appropriate controls to ensure compliance and organizational resilience.
