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REPUTATIONAL RISK MANAGEMENT

Reputational risk arises when the Bank’s reputation is dam- ment, risks emerging from a host of different sources and
aged by one or more reputational events from negative locations is difficult to keep up with and to know how best
publicity about the organization’s business practices, con- to respond if they occur. The effects of the occurrence of
duct or financial condition. The Bank’s Strategic and Repu- a reputational risk event include but are not limited to the
tational Risk Management is mandated to protect the Bank following:
from potential threats to its reputation. The team contin-
uously uses proactive means in minimizing the effects of • Loss of current or future customers;
reputational events, thereby averting the likelihood of ma- • Loss of public confidence;
jor reputational crises with the view of ultimately ensuring • Loss of employees leading to an increase in hiring
the survival of the organization. The Bank has put in place a costs, or staff downtime;
framework to properly articulate, analyze and manage rep- • Reduction in current or future business partners;
utational risk factors. • Increased costs of capitalization via credit or
equity markets;
Access Bank takes the management of reputational risks • Regulatory sanctions;
seriously because of its far-reaching implications which are • Increased costs due to government regulations,
buttressed by the fact that the Bank operates under: fines, or other penalties; and
• Loss of banking license.
• A highly regulated financial services industry with
high visibility and vulnerability to regulatory The Group policy provides for the protection of the Group’s
actions that may adversely impact its reputation. reputation and should at all times take priority over all other
(e.g. corporate governance crises); activities, including revenue generation. Reputational risk
will arise from the failure to effectively mitigate one or more
• Keen competition and largely homogeneous of country, credit, liquidity, market, regulatory and opera-
products and services have led customers not to tional risk. It may also arise from the failure to comply with
perceive significant differences between financial social, environmental and ethical standards. All employees
service providers; and are responsible for day-to-day identification and manage-
ment of reputational risk.
• Given the financing nature of products and
services they provide, banks are not only exposed The desired risk appetite for reputation is low risk (1). The
to their own reputation, but also to the reputation Bank will ensure that highest ethical standards are followed
of their clients. at all times and the code of conduct policy will be strictly im-
plemented.
With banks operating and competing in a global environ-

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Annual Report & Accounts 2017