Assessment of Reputational Risk Management Maturity Levels of Banks

Abstract

Due to the nature of their activities, reputational risk is one of the main risks that should be managed for banks. Since corporate reputation is an intangible asset, it is extremely difficult to measure reputational risk. On the other hand, the maturity level of banks for the management of reputational risk is extremely important in terms of reducing the effects of reputational losses that may be exposed. The aim of this study is to develop a framework for evaluating the maturity level of reputational risk management in banks. For this purpose, based on the COSO Enterprise Risk Management Framework, the attributes that can be used in the evaluation of the reputational risk maturity level, the values related to these qualifications and the evaluation criteria for each attribute are defined. In addition, 5 different maturity levels were created for banks according to the total score obtained by combining the values calculated for each attribute, taking into account Bak and Jedynak (2023). This proposed framework can be used as a framework in which banks can evaluate themselves and legal authorities can evaluate banks in terms of determining the maturity level of reputational risk management.