What type of risk involves breaches in data protection and theft of information?

The correct answer is cyber risk because it specifically pertains to the threats and vulnerabilities associated with technology and information systems. Cyber risk encompasses the potential for breaches in data protection, unauthorized access, and theft of sensitive information. This type of risk has grown significantly with the increasing reliance on digital systems and the internet, making organizations susceptible to various forms of cyberattacks, such as hacking, phishing, and malware.

Understanding cyber risk is crucial for organizations as it impacts not just their operational effectiveness but also their compliance with data protection regulations and their overall security posture. It emphasizes the importance of implementing robust cybersecurity measures to safeguard against data breaches and protect user privacy.

Operational risk refers to losses resulting from inadequate or failed internal processes, systems, or external events, but it is broader and not limited to cyber threats. Market risk relates to the financial losses that can occur due to changes in market prices or rates, while reputational risk concerns the potential harm to an organization's reputation that can arise from various incidents, including those related to cybersecurity. However, it does not directly address the technical aspects of data protection breaches.