February 2013

Managing Reputation and Risk in a Digital Age

Managing Reputation and Risk in a Digital Age

Change is afoot in reputational risk and it’s the financial services sector that is leading the way.

Prompted by expensive scandals such as PPI, Libor and Interest Rate Swaps, financial services firms are coming under pressure from regulators, boards and stakeholders who want to see evidence that future risks are being better managed.

So their risk teams are turning to corporate affairs, brand marketing, PR and HR departments who, often unfamiliar with the narrative of risk, are being asked to report on reputational risk in management information.

However, reporting based on media cuttings, positive and negative sentiment, strength of brand, customer and employee satisfaction surveys or the number of MP briefings simply doesn't cut it in a digital age.

Reputational Risk has changed fundamentally in three ways:

  1. Reputational Risk is about understanding reputation quality, strength and drivers at any point in time.
  2. Reputational Risk must embrace a digital world where stakeholders influence each other and share information quickly.
  3. Reputation Risk analysis must assess immediate risks, emerging and changing by the hour

Understanding the ‘art of the possible’ in relation to reputational risk can assist risk and corporate affairs teams to meet the new demands being made of them.

This is the art of the possible in contemporary reputational risk management using reputation monitoring tools such as Reputation Tracker.

  • Immediacy. Monitor live reputational risk.
  • Comparisons. See risk in context to your sector and competitors.
  • Early Warnings. Track emerging issues and swings towards strong negative emotions.
  • Prioritising. Understand where concerns are strongest to prioritise key issues for immediate attention.
  • Best practice. Retropsective analysis provides opportunities to learn from the past and identify best practice.
  • Prediction. Monitor the ebb and flow to predict reputational risk, by understanding cause and effect.