Using sentiment analysis for reputation risk management

When it comes to risk management, one of the major pillars to monitor and manage is reputational risk. Unlike credit or interest rate risk, reputational risk is hard to define and even harder to quantify. Given the number of discussions on various news platforms, social media channels, and forums, there are hundreds and usually thousands of discussions taking place without a bank’s knowledge. Sites like Yelp, Glassdoor, Twitter, Facebook and similar usually get the bulk of those mentions, but also there are a handful of blogs that are either likely to talk about your bank from a community service perspective or from an investment perspective.  In this post, we explore one way that we monitor and manage reputational risk and walk through our preliminary framework in order to help other banks evolve their thinking.

CenterState Bank As A Case Study

The larger and more relevant your bank is, the apter the public is going to talk about you. Banks that have active social media programs do so in part to increase that relevancy and in part to attempt to influence that conversation. However, even if your bank has no social media program, your reputation is still at risk every day.

For non-exchange traded banks, most of the discussion is usually around a bank’s retail service level or charity work.  This is the bulk of our conversations and is fairly straight forward. However, if you are publicly traded, then there are likely do

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