What does the public think about my institution? How do the shareholders rate our actions? Every good bank board member asks themselves these questions regularly. It is not only since the last financial crisis that banks have had to worry about their good reputation and therefore usually employ a considerable number of employees who are actively tasked with improving it. However, there are still only a few procedures or methods that specify a certain course of action in the event of impending or materialised reputational risks. The lack of such structures is often associated with financial damage or considerable effort in the clean-up process - as the last ten years have clearly shown.
The regulators demand more commitment
Reputational risks are now also playing an increasingly important role at regulatory level. In particular, the EBA's SREP guidelines formulate the expectation that banks establish dedicated rep-risk management processes - which also harbours opportunities for the financial institutions concerned to recognise and counteract risks in a structured manner.
There are various ways to prevent potential losses due to reputational risks. The introduction of a reputational risk committee, supplementary scenario analyses and the successful implementation of a management framework are all measures that can be decisive for a bank. A balanced harmonisation of these different elements with each other and with the financial institution is of enormous importance, especially for sensitive customer relationships based on trust.
We support you with comprehensive expertise
Contact us and benefit from our extensive experience in reputational risk management. With our expertise, we will be happy to help you successfully integrate preventive and reactive reputational risk management into your institutional structures or optimise your existing risk management system.
