This risk type occurs in both financial and non-financial risk (NFR). In financial risk, it is the result of increased exposure to a single counterparty, investment, etc. and can be mitigated through either diversification or risk management. In non-financial risk, it is usually the result of an increased exposure of the organization’s operations to a factor or entity. For example, concentration risk can occur if the organization relies on a single third party for multiple activities, such as cloud data storage and computing.

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