Managing Reputational Risk in The Age of Social Media: Challenges for Modern Banks
Managing Reputational Risk in The Age of Social Media: Challenges for Modern Banks

Author(s): Mariana Draganova
Subject(s): Economy, Business Economy / Management, Financial Markets
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: reputational risk; banking; social media; operational resilience; governance; AI; trust management; crisis communication
Summary/Abstract: Reputational risk has become one of the most critical non-financial risks in the banking sector, driven by the accelerating pace of information and the power of social media. The study explores how banks can manage this risk in a digital context where perception spreads globally in seconds. It combines qualitative analysis, case studies, and regulatory review to examine the mechanisms through which social media amplifies crises. Findings reveal that social platforms can create “digital bank runs,” where negative sentiment quickly turns into financial loss. The paper concludes that banks must integrate artificial intelligence (AI)-based monitoring, transparent communication, and an ethical culture into their governance structures. The contribution of this research lies in its interdisciplinary perspective, bridging finance, technology, and behavioral science, to propose a framework for sustainable reputation management in modern banking.

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