Reputation Risk

An institution's decision to offer e-banking services, especially the more complex transactional services, significantly increases its level of reputation risk. Some of the ways in which e-banking can influence an institution's reputation include:

  • Loss of trust due to unauthorized activity on customer accounts,
  • Disclosure or theft of confidential customer information to unauthorized parties (e.g., hackers),
  • Failure to deliver on marketing claims,
  • Failure to provide reliable service due to the frequency or duration of service disruptions,
  • Customer complaints about the difficulty in using e-banking services and the inability of the institution's help desk to resolve problems, and
  • Confusion between services provided by the financial institution and services provided by other businesses linked from the website.

 

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Risk Management of E-Banking Activities