What is a risk matrix?

A risk matrix is a tool used in risk management to help identify, assess, and prioritize risks. It is a visual representation of the likelihood and potential impact of different risks.

A typical risk matrix is a two-dimensional grid, with likelihood (or probability) on one axis and impact (or severity) on the other. The likelihood and impact are usually rated on a scale of low, medium, or high, and the resulting combinations are plotted on the matrix.

The risk matrix is often color-coded to make it easier to interpret. For example, risks that fall into the high-likelihood and high-impact quadrant might be marked in red, while risks in the low-likelihood and low-impact quadrant might be marked in green.

The risk matrix is used to prioritize risks based on their potential impact and likelihood of occurring. This allows risk management teams to focus their attention and resources on the most significant risks and develop appropriate mitigation strategies to reduce the likelihood or impact of those risks.