Managing Reputation Risk in the Banking Sector

I just read a superb article on the Banking Exchange website entitled 4 strategies for managing reputational risk – Banking Exchange.

This article offers very good advice to all banking institutions out there. They offer 4 guidelines: “For most financial institutions, the best defense will be a good offense: going out of their way to build goodwill that can carry them through a tarnish to their brand; monitoring their reputation on social media; and preparing for the inevitable event that can potentially damage reputation with a well-thought-out crisis playbook plus a fourth: the importance of being flexible”.

In the article mentioned is made of the fact that managing reputational risk is difficult, as it is “ill-defined by the regulators”. In fact many organizations find it difficult.

In my Reputation Risk Management Master Classes I define it in 4 different ways, so that the audience can get a more systemic view of it. (Next Master Class 16 – 17 November in Johannesburg).

There is also mention made of the importance of a Crisis Playbook. My DIY Nano-Seconds Crisis Management Toolkit is designed to just that. The toolkit is a highly effective, low cost guide that will assist any business to develop a written and practical crisis management action and crisis communication response plan and can also serve as a useful benchmark where plans already exist, as it may reveal potential gaps.

I really like what the last sentence says:”Banks also should recognize, say the experts, that they can’t deal with reputational risk in isolation. It needs to be part of their overall risk governance. It’s now a high-stakes C-suite issue that is getting a lot of needed attention”.

The Management and Mitigation is no longer a PR or Communication issue, it is definitely a Governance, Risk and Ethics responsibility.