What does the term "residual risk" refer to?

Residual risk is defined as the level of risk that remains after security measures and controls have been implemented. When organizations assess and apply their security measures, they aim to reduce vulnerabilities and threats to an acceptable level. However, it is often impossible to eliminate all risks entirely due to various factors, such as the inadequacy of controls, the evolving nature of threats, or limitations in resources. Therefore, the concept of residual risk acknowledges that there will always be some level of uncertainty and potential for loss that an organization must be prepared to manage. This understanding is crucial for effective risk management and helps in making informed decisions regarding additional risk mitigation strategies or acceptance of the remaining risk.