Date: 09.04.2020EXPIRED: Is it conceivable that the strict segregation of the front and back office might be relaxed on a temporary basis during the crisis in order to accelerate the processing of loan applications?
As a rule, the principle of dual voting in risk-relevant credit business should be observed. To mitigate the impact of staff shortages resulting from the crisis, BaFin considers a more flexible deployment of staff members, i.e. through alternately distributing staff experienced in the granting of loans between the front and back office, acceptable in exceptional circumstances in order to maintain the institution’s operational capacity. Therefore, staff members in the front office could, for example, switch to the back office during the crisis in order to perform the process steps allocated to the back office and vice versa. The organisational segregation of duties eliminates the possibility of conflicts of interest arising when the same staff members processes loans in both the front and back office; nonetheless, during the crisis and in the event of staff shortages, institutions may decide not to maintain this strict segregation of duties. In any case, institutions should appropriately consider and manage the risks that arise when the same staff members perform duties in both the front and back office, even if these duties relate to different loans.
