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Glossary › Inherent Risk
Inherent Risk Definition
Inherent risk reflects the exposure created by the nature of a vendor’s service, data usage, technologies, and business impact without considering controls. In TPRM, inherent risk determines the required assessment depth and monitoring frequency.
FAQs
Why calculate inherent risk?
It sets the baseline for controls and oversight.
Does inherent risk change over time?
Yes, as scope or data usage evolves.
Is inherent risk part of vendor tiering?
Yes, it often determines vendor tier classification.
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