Which strategy involves shifting risk to another party?

The strategy that involves shifting risk to another party is known as risk transference. This approach is commonly used in various contexts, including cloud security and overall risk management. By transferring risk, an organization effectively outsources the responsibility for certain risks to another entity. For example, purchasing insurance is a typical method of risk transference, where the insurance company assumes the financial risk associated with potential losses.

Transferring risk can also occur through contracts or agreements where a third party takes on the responsibility of managing specific risks, such as when using a cloud service provider that guarantees certain levels of security and compliance. This allows the organization to focus on its core activities while placing the burden of specific risk management onto another entity better equipped to handle those risks.

In contrast, risk mitigation focuses on reducing the impact or likelihood of a risk, risk avoidance aims to eliminate the risk altogether, and risk acceptance involves recognizing the risk and deciding to tolerate it without any active measures to avoid or mitigate it. Each of these strategies addresses risk differently, but only risk transference explicitly entails the concept of passing the risk onto another party.