Identifying and mitigating perceived risks in the bank service chain: A new formalization effort to address the intangible and heterogeneous natures of knowledge-based services

Due to the intangible and heterogeneous natures of services, classical control approaches might not provide the relevant safeguards to enable a typical bank to reach its objectives. Knowledge-based services result from diagnoses and evaluation performances whose value and quality levels are complex to measure as they are essentially based on perceptions and subjective opinions. Consequently, services cannot benefit from supply-chain risk approaches such as automation, statistical control process, and system reliability techniques in order to avoid any kind of disruption and quality lowering. To tackle these specific service-type risks, we suggest a new way of formalizing the risk management process adapted to the service chain of banks. To illustrate a default of risk management, we have opted for the bank industry and the Société Générale case. Based on secondary sources, we related the chain of events that led to the enormous loss of money for the Société Générale in 2008.