The Zone of Essential Risk

Bruce and Bob Blakley ran into each other at a summit and had an interesting discussion on fraud pattern and use of escrow agents. The outcome was what Bob calls a "zone of essential risk".

Bob concluded that there are only three ways to avoid fraud - make your transactions smaller, make your transactions bigger, or make your transactions more frequent. Overall, what he advises is to not order risk "medium-rare".

In my opinion, Bob's theory can also be applied to Risk Assessment calculation (likelihood-impact analysis). Going with his logic, if I map Transaction size to impact and reversed map frequency to likelihood, "medium-frequent" will be the most costly to manage and should be given highest priority. GREAT!