5 categories of risk modern companies need to consider

In today’s fast-evolving business world, risks lurk around every corner. From cyberattacks to operational hiccups, mastering integrated risk management is crucial for any company aiming to stay ahead. Today’s breakdown cuts through the complexity of modern risk management and highlights what you really need to watch out for, making the process approachable and straightforward.

1. Information Security Risks

Protecting sensitive data (e.g., customer data, intellectual property, employee records) is critical for any company. With cloud-based systems and remote work, the attack surface expands, making it vital to address risks related to unauthorized access, data breaches, malware, and phishing attacks. Th is category also includes securing APIs, endpoints, and employee devices.

High Probability Risk Example:
Phishing attacks targeting remote employees who use personal devices for work, leading to compromised credentials and unauthorized access to company systems.

See a list of Top 10 Information Security Risks to monitor in 2025

2. Operational Risks

Operational risk is the risk of losses from internal shortcomings, human errors, or system failures. It the context of information security it includes risks associated with cyber-attacks, data breaches, and system disruptions, directly threatening the safety, availability, and privacy of your digital information. These risks directly impact service delivery and customer satisfaction.

High Probability Risk Example:
Outage in a critical SaaS platform (e.g., CRM or project management tool) used across the company, causing delays in client deliverables and miscommunication between teams.

See and download a list of 25 example operational risks here.

3. Compliance and Regulatory Risks

Compliance and Regulatory Risks refer to the risk of legal penalties, reputational damage, or business interruptions resulting from failure to adhere to various laws and regulations. In the context of information security such regulations often are GDPR, CCPA, NIS 2 and DORA.

These risks become particularly significant when operating across multiple jurisdictions and utilizing cloud services. Ensuring compliance with data protection, cybersecurity, and employment laws is essential to maintain trust and avoid financial penalties.

High Probability Risk Example:
Failure to adequately map and document data flows for GDPR compliance, resulting in potential regulatory fines during an audit or breach investigation.

4. Vendor and Third-Party Risks

Relying on third-party cloud services, software vendors, and contractors introduces risks tied to their performance, security practices, and business continuity. Issues such as service outages, data breaches, or failure to meet contractual obligations can significantly affect the company. This category ensures the assessment and management of risks that arise from external dependencies.

High Probability Risk Example:
A data breach at a cloud storage provider exposing sensitive client or business data, leading to reputational damage and potential client loss.

5. Physical and Environmental Risks

Even in a tech-driven, cloud-first company, physical and environmental risks remain relevant. These include risks to office facilities, such as theft, natural disasters, or damage to physical servers or critical infrastructure. Additionally, ensuring a safe and secure environment for employees, whether in-office or remote, is essential to maintain operations and employee satisfaction.

High Probability Risk Example:
Theft of company laptops from an office or coworking space, leading to potential data exposure if devices are not encrypted.

Summary

Facing the mixed bag of business risks can be tough, but it’s key to keeping everything running smoothly. We’ve pinpointed five major risk areas: Information Security, Operational, Compliance and Regulatory, Vendor and Third-Party, and Physical and Environmental. Each comes with its own headaches that could slow you down or tarnish your reputation. By getting savvy about these risks and staying on your toes, you can protect your operations and even turn savvy risk management into a competitive edge, making your business tougher and ready for anything.