What is risk?

Put simply, risk is what could go wrong. If that sounds too gloomy, think of it as what might not go as expected. A delivery that shows up late, a price that drops, a typo in a form or a website that goes down are all risks.

Risk never shows up alone, though. There’s no reward without taking some risk, so you can’t judge a risk by itself. You always weigh it against what you stand to gain. That makes risk management a series of trade-offs: is the reward worth the risk, and is it worth what it costs to protect yourself?

In a big bank, risk can feel like something far away. There are rules, tools, committees and a whole risk team, so it’s easy to think risk is their job and not yours. But everyone takes risks and makes these trade-offs every day. Not having a committee doesn’t mean you aren’t making the decision. Risk in everyday life shows what that looks like in a small corner shop.