Hit enter to search or ESC to close

logo-block
alva
Get in touch
logo-block-tablet

The “mega” forex fine and its cost to corporate reputation

Leaps forward in the quantification of reputational impact are making a compelling link between conduct and reputation. Pioneering research by Peter Mitic, head of operational risk methodology at Santander, has begun to quantify the “price” of reputational events on a business.

This has an important implication for the “mega” forex fines announced on 20th May 2015 by US and UK regulators: The full cost of a fine is not just borne out by penalties from the regulator but the eventual financial costs stemming from the reputational hit on product sales or the price the firm can command for its debt. In terms of bottom line, the impact of a reputational event matters.

Crucially, the time lapse between a present event and the consequent financial losses or gains presents a window of opportunity. The window may be open for a matter of days or several weeks or months depending on the event, but ultimately behooves opportunity maximisation over risk mitigation or frantic firefighting. During this “grace” period the amount of resources given to managing the issue can be determined by a clear awareness as to how the business’ reputation is impacted and how this compares with its peers.

For example, in the context of forex “mega” fines, live alva data shows UBS and JP Morgan are faring better than peers since the news hit the press on 20th May. A case study analysis of the data indicates clear areas of differentiation between the two banks versus competitors in terms of media coverage. This in turn can provide insight into how other banks might “catch up” and take action during the window of opportunity.

– Joel Thompson

See more articles
Join our Newsletter

Be part of the Connected Intelligence community Join our Newsletter

Join our Newsletter

As fears grow of a second lockdown and a number of workplace outbreaks cause rethinks to office reopenings, businesses are once again in the frontline of the pandemic.

👉 Download our weekly #Covid19 report: https://t.co/X2PAgL7iWH #reputation

The post-pandemic world will see an ever-greater focus on environmental, social and governance issues. Business leaders need to be aware of how #ESG #risks can affect their company, and register stakeholders’ priorities in this area 👇 https://t.co/s2bREggLYk

alva's CEO Alberto López - @alvaceo is speaking at Corporate Excellence's #JIM20 on real-time and predictive analytics today - hope to see you there!
https://t.co/jblhY9pfhg

Load More...

Be part of the Connected Intelligence community

To join our Connected Intelligence community simply complete the form below.