unsystematic risk

Non-system Risks

Non-system risks refer to events that may not be related to a software system or network, but that can still adversely affect its security. These risks are often human in nature, or related to organizational or environmental factors, or the legal environment in which the system operates. Loss of integrity, availability, or confidentiality of data can result from a variety of non-systems threats.

1. Physical insecurity

Physical insecurity is any vulnerability to unauthorized physical access (or tampering) of your system and its components. Physical insecurity could include weak locks or other mechanisms that allow people to access sensitive data or break into a system. In some cases, physical insecurity could also include environment conditions, such as inadequate temperature or ventilation, which can cause system failures or damage. It is important to remember that anyone with physical access has the potential to access all of the components of a system.

2. Human error

Humans make mistakes and this can be a major source of system vulnerabilities. Poor configuration of the system, inadequate training, and unauthorized changes can all contribute to security issues. In addition, users could be tricked into installing malicious software or revealing sensitive information.

3. Insiders

Insiders are individuals who have been granted access to a system, either through an official job role or other means. Insiders may be able to access sensitive information that is normally inaccessible to unauthorized users. Insiders must be trusted, therefore it is important to have a clear understanding of responsibilities and rights of the users within an organization.

4. Legal issues

Legal issues can also be a source of insecurity for a system. Certain laws and regulations may require protections for specific types of data or limit how you store or use data. Organizations must be aware of the laws that apply to them and ensure that their system is in compliance with them.

5. Suppliers

Vendors and other third parties used by an organization to provide services, products, or software may also present security risks. Outsourced services and software are widely used in organizations and these come with their own set of risks. Organizations need to make sure that the companies they do business with have the necessary security measures in place.

6. Legacy systems

Legacy systems are older systems that may be more vulnerable to security threats due to outdated protocols, software, and hardware. These systems can be difficult to maintain and upgrade and can put an organization at risk. Therefore, these systems should be monitored closely and patched as needed.

7. Social Engineering

Social engineering is a form of attack that relies on tricking people into revealing sensitive information or committing a certain action. Social engineering can be used to steal information or plant malicious software on a system. It is important to raise awareness about social engineering tactics and how to protect against them.

Non-system risks are often overlooked when assessing the security of a system. However, a comprehensive security plan should take into account these risks and take the necessary steps to mitigate them. Organizations should regularly assess their system for vulnerabilities and take action to close any gaps. It is also important to have strong policies and procedures in place to ensure the security of the system.

Non-systemic risk is the risk that an individual business or asset faces. It is specific to the business, sector or asset in question and is not related to broader market fluctuations or general economic trends. Non-systemic risk can include regulatory risk, competition risk, technological risk, legal risks, financial risks, supply risks and other such specific risks.

Regulatory risk is the risk associated with changes in laws and regulations that affect the ability of an entity to conduct business. This type of non-systemic risk is particularly prevalent in industries that are heavily regulated, such as banking and finance. Financial risks are those associated with financial instruments or structures and the potential for losses associated with them, be it through volatility in the markets or any changes to the terms and conditions of the instruments themselves.

Competition risk is the risk of a business not being able to compete effectively, such as due to the presence of competitors with more attractive products, services or prices. This type of risk is common in highly competitive industries such as retail and technology. Technology risk is the risk associated with the rate of development of technology and its ability to quickly disrupt established business practices.

Legal risks are associated with a business’s compliance with existing laws and regulations, as well as the potential for liability – either through fines, penalties or litigation – if the legal obligations are not met. Supply risk is the risk associated with potential disruptions or changes to a business’s supply chain. This could be due to political changes, natural disasters, or even changes in customer demand.

Overall, non-systemic risk affects businesses, sectors and individual assets in highly specific ways and requires specialized responses tailored to the particular business, industry or asset. Understanding and responding to these risks is essential for successful risk management and long-term profitability.