1. Credit risk management - collateral - other credit enhancement.
In relation to lending, borrowing and other types of credit, unsecured means there is no additional backing to protect the lender or other creditor, beyond the general credit of the issuer.
All other things being equal, unsecured arrangements are riskier for the lender or other creditor, compared with secured arrangements.
2. Safety - confidentiality - controls - systems - procedures.
In relation to physical safety and confidentiality, unsecured is a higher risk situation.
Systems, procedures and related controls are relatively weak, or they may be entirely absent.
Secured situations are safer and more confidential.
- Hotspot sniffing
- "Any email, web search or file transferred between computers or opened from network locations on an unsecured network can potentially be captured by hackers."
- The Treasurer's Wiki