Banking · Risk Management & Operations
A mid-sized private bank is experiencing a surge in 'Retail Delinquencies' in its unsecured personal loan portfolio. An internal audit reveals that the 'Sourcing Team' has been bypassing the 'Telephone Verification' process to meet monthly targets. As an Operations Manager, you are tasked with redesigning the workflow to include an 'Independent Verification Unit (IVU)'. How should this unit be positioned within bank operations to ensure maximum effectiveness in reducing credit risk?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The IVU should be a voluntary step in the workflow, used only for applications where the customer's credit score is below a certain threshold.
- 2The IVU should be outsourced to a third-party agency to reduce operational costs, with the branch manager having final authority to overrule negative reports.
- 3The IVU should be a part of the Retail Loan Processing Center (RLPC) and report to the Risk Management Department, ensuring no loan is disbursed without a positive verification report from non-sales staff.✓
- 4The IVU should report directly to the Sales Head to ensure verified leads are converted into customers as quickly as possible.
Correct answer
The IVU should be a part of the Retail Loan Processing Center (RLPC) and report to the Risk Management Department, ensuring no loan is disbursed without a positive verification report from non-sales staff.
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