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      Question

      What is 'Risk Assessment' in the context of IT security

      for banks?
      A The systematic process of identifying assets, identifying threats and vulnerabilities, evaluating the likelihood and impact of risks, and prioritizing mitigation actions Correct Answer Incorrect Answer
      B The process of testing software applications for bugs and errors to ensure that the application will run smoothly at the user end. Correct Answer Incorrect Answer
      C The annual financial audit of IT department expenditures where all financial aspects are looked into. Correct Answer Incorrect Answer
      D The process of purchasing cybersecurity insurance for IT assets so that the IT assets are protected from any kind of attack. Correct Answer Incorrect Answer
      E The evaluation of employee performance on security awareness that assesses the level of risk for an organization from cyberattacks. Correct Answer Incorrect Answer

      Solution

      Risk Assessment process:  1) Asset Identification (critical systems, data, processes). 2) Threat Identification (hackers, insiders, natural disasters).  3) Vulnerability Identification (weak passwords, unpatched systems).  4) Risk Analysis — Qualitative (High/Medium/Low matrix) or Quantitative (ALE = ARO × SLE).  5) Risk Treatment: Accept, Avoid, Transfer (insurance), Mitigate.  RBI's IT Risk and Cyber Security Framework mandates formal risk assessments for all banks. ISO 27001 and NIST frameworks guide structured risk management.

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