Definition:
Risk mitigation is the process of identifying, assessing, and reducing risks that could negatively impact business operations, particularly in regulatory compliance.

Contextual Explanation:
Financial institutions use risk mitigation strategies such as due diligence, transaction monitoring, and compliance audits to prevent fraud, cyber threats, and regulatory breaches.

Why It Matters:
Effective risk mitigation helps organizations avoid financial losses, legal penalties, and reputational harm.

Example:
A payment processor implementing real-time transaction monitoring to detect fraudulent activities minimizes compliance risks and financial losses.