Most banks pay little attention to their online reviews. This is a problem as reputational risk is often monetized, either positively or negatively on the back of online reviews. Either banks don’t cultivate reviews or worse, they never think of them. Not only do reviews influence potential new customers more than any other single source but they can have a material impact on search engine rankings. In a recent Brightlocal survey, 94% of respondents said they look up online reviews before choosing a business.
Tag: Reputational Risk
The latest Gallup Poll result came out this month and show bankers still in the middle of the pack of professionals among the public's perception of honesty and ethics. Unfortunately, we dropped a point in 2016. We are sure community bankers would have ranked higher if it weren't for the antics of some of our larger brethren, but this data is mildly interesting.
Here is the latest data:
When it comes to risk management, one of the major pillars to monitor and manage is reputational risk. Unlike credit or interest rate risk, reputational risk is hard to define and even harder to quantify. Given the number of discussions on various news platforms, social media channels, and forums, there are hundreds and usually thousands of discussions taking place without a bank’s knowledge.
Last month’s Consumer Financial Protection Bureau (CFPB) study combined with the Wells Fargo account opening fraud and Friday’s public letter from six senators will cause many banks to rethink arbitration clauses in their account documents. While banks argued for decades that arbitration clauses are a common commercial practice in the U.S. and benefit customers to settle conflict quickly and inexpensively than going to court, the CFPB is about to argue that it helps hide wrongdoing while denying fundamental legal rights.