How "Worthy" Is "Worth It"?

"Worthiness" is commonly defined as "the quality of deserving respect or attention." In the eyes of a financial institution, onboarding or maintaining an ongoing business relationship with a high-net-worth customer is "worth it" – but is it always "worthy"? Warren Buffet once said, "it takes 20 years to build a reputation, and five minutes to ruin it". This article advocates that at times financial institutions ought to look at the bigger picture through the lens of reputational risk that may be associated with the profiles of their customers. If not, this may come at a very expensive cost.

A reputational risk refers to the threat in terms of profitability or sustainability of a financial institution that is triggered by the public's unfavourable perception of the organization. For instance, if a financial institution has a high-net-worth customer who is a pedophile, the public could cast doubt on the positive image, integrity and goodwill of the financial