In bank compliance, what is meant by the term "reputational damage"?

The term "reputational damage" refers to harm to the bank's public image, which can arise from various factors such as compliance failures, unethical practices, or negative media coverage. When a bank experiences reputational damage, it can lead to decreased customer trust, loss of business, and long-term impacts on its ability to attract new clients and retain existing ones. This damage affects how customers, partners, and the broader community perceive the financial institution, often making it difficult for the bank to recover its standing in the market.

In contrast, the other choices reflect positive outcomes for a bank, such as increased market share, positive publicity, and greater customer satisfaction, which are all beneficial and desirable for maintaining a strong and favorable reputation.