How does Reputation Risk affect Bank's business ?

Reputation Risk is the risk arising from the potential that negative stakeholder opinion or negative publicity regarding business practices, whether true or not, will adversely impact current or projected financial conditions and resilience, cause a decline in the customer base, or result in costly litigation. Reputational risk is a threat or danger to the good name or standing of a business or entity. Reputational risk can occur directly, as the result of the actions of the company and indirectly, due to the actions of an employee or employees. Over time, it can erode the bank's brand value, reduce business opportunities, and adversely impact profitability and long-term sustainability.