Topic
Risk Classification
Risk classification is the process of categorizing AI systems, data, or algorithmic decisions into risk levels (typically low, medium, high, or critical) based on their potential impact on individuals, organizations, or society. This systematic approach enables enterprises to allocate governance resources proportionally, apply appropriate controls, and ensure compliance with regulations like the EU AI Act that mandate different oversight requirements for different risk tiers. For AI governance and compliance, risk classification serves as a foundational practice that helps organizations prioritize audits, testing, and monitoring efforts while demonstrating to regulators that they understand and can manage their AI portfolio responsibly.
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