Reputational risk and its cases

CONTENT

TYPES OF RISKS IN BANKING

IMPORTANCE OF REPUTATION
Employees: Are more loyal to a company with good reputation. Help with recruiting
Investors and business partners: Will take risk in a company that they can thrust based upon its reputation. (More than 90% think about reputation in investment decisions: 40% care about reputation, 50% care partially).
Lawmakers and regulators: Reputation can help lessen the legal burden on a company.
Public at large: Preserve ―social license‖ to operate
Customers and suppliers: Support loyalty to company
Competition: Barrier to entry

Managing reputation risks

Reputation Risk Cases

Conclusion
Building a financial institution's reputation may take years, but it certainly can be damaged or even destroyed very quickly. Reputational risk exists in a combination of factors that financial institutions face every day