OPERATIONAL MODEL OF INTERACTION BETWEEN STRUCTURAL UNITS OF THE BANK IN THE PROCESS OF NON-PERFORMING LOANS DEBT MANAGMENT
Abstract
The relevance of the study is due to the fact that effective management of non-performing loans requires the organization and implementation of a system of interaction among bank units involved in the process of working with non-performing loans. The purpose of the article is the theoretical and practical substantiation and development of recommendations for organizing the interaction of the bank's structural units working with non-performing loan debt, and the development of the author's operational model of interaction between the front office and back office, with the definition of the main process stages, roles, KPIs, and SLAs. The methodological basis of the study consists of the methods of logical generalization and synthesis, and a systems approach. In the article, the mentioned issue is analyzed from the perspective of management, whereas banking often focuses on the context of accounting and financial management. The scientific novelty of the study lies primarily in attempt to formalize the full life cycle of non-performing loan management, from early identification and soft collection to restructuring, legal recovery, sale, or write-off of the asset. In contrast to fragmented approaches, which usually examine individual stages of this process in isolation, the proposed model delineates the functions of the front office, back office, non-performing assets unit, risk management, legal service, compliance, and the collegial bodies of the bank within unified logic. Particular attention is paid to the RACI allocation of roles: who is responsible, who approves, and who is merely informed. The model outlines the points of case handover, control events, escalation mechanisms, as well as KPI and SLA indicators, which are likely to improve the effectiveness of interaction among the structural units of the bank. The practical significance of the results is seen in the possibility of using the model to increase the transparency of the process, reduce the response time to the deterioration of credit quality, and decrease the duplication of functions among units. Further research may be directed towards the empirical testing of the model using Ukrainian banks as an example, as well as towards the development of quantitative criteria for assessing the effectiveness of interaction between the front and back offices.
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