Research and improvement of the administration of compliance-risk monitoring mechanisms in the branch of MTB Bank in the Ivano-Frankivsk region
Students Name: Kharchuk Vitalii Yuriiovych
Qualification Level: magister
Speciality: Business Administration
Institute: Institute of Economics and Management
Mode of Study: full
Academic Year: 2023-2024 н.р.
Language of Defence: англійська
Abstract: Vitalii Kharchuk, Nataliia Duliaba (manager). Research and improvement of the administration of compliance-risk monitoring mechanisms in the branch of MTB Bank in the Ivano-Frankivsk region ("Research and improvement of the administration of compliance-risk monitoring mechanisms in the branch of MTB Bank in the Ivano-Frankivsk region"). Master’s qualification thesis. - Lviv Polytechnic National University, Lviv, 2023. Extended abstract Business administration plays an important role for the effective functioning of any enterprise, as its primary task is to ensure the efficient operation of business entities. The activities of commercial banks are diverse and accompanied by a number of risks. That is why the study of the administration of risk mechanisms is an actual issue. Particular attention is paid to compliance risk, which indicates the ability of a commercial bank to comply with both current legislation and internal standards and policies of the bank’s activities as a whole. Thus, the goal of the master’s qualification work is to research and improve the administration of the compliance-risk monitoring mechanism in the activity of the MTB Bank Branch in the Ivano-Frankivsk region. The subject of the study is to identify the peculiarities of the administration of the compliance risk monitoring mechanism in the activity of the MTB Bank Branch in the Ivano-Frankivsk region and to develop appropriate measures to improve the business administration of compliance risk monitoring of this business entity. The most complete and accurate interpretation of the concept of "compliance risk" is given in Resolution of the Board of the NBU No. 172 [1], according to which this risk is interpreted as a potential threat of incurring losses, incurring sanctions or additional losses, failure to receive income, deterioration of the reputation of a commercial bank, due to failure to comply with the requirements, rules, standards, principles defined in legislation, regulatory acts, recognized international standards, corporate ethics policies, avoidance of conflicts of interest, internal bank regulatory documents, etc. The issue of studying the compliance risk monitoring mechanism in the work of commercial banks is also an object of scientific research. In particular, in the writings of Guro, V. (2023), various approaches to the interpretation of the studied concept are systematized, the importance of internal and external compliance control is outlined, and the need for anti-corruption compliance is substantiated. Scientists Kvasnytska, R., Kudryk, N. and Khytra, O. (2022) in their research emphasize the importance of system monitoring, which should involve various structural divisions and management links of a commercial bank, in particular, the supervisory board, the bank’s board , relevant units for compliance control and other internal services of a commercial bank. It should be noted that the features of compliance risk monitoring mechanisms are given in a number of international standards and practices. The object of the study is the Branch of MTB Bank in the Ivano-Frankivsk region, which provides a diverse range of banking services to both individuals and legal entities. The tasks of this master’s qualification work are the analysis of literary sources that highlight the peculiarities of the administration of the compliance-risk monitoring mechanism, the elaboration of the main normative and legislative acts that regulate the activities of commercial banks, the analysis of the financial, economic and administrative activities of the company MTB Bank Branch in Ivano-Frankivsk oblast, researching the peculiarities of the administration of the compliance-risk monitoring mechanism in the MTB Bank Branch in the Ivano-Frankivsk region, forecasting the dynamics of the main indicators of the commercial bank’s activity, developing and substantiating recommendations for improving the business administration of compliance risk monitoring. In order to develop the measure, according to the assignment for the master’s thesis, a comparative analysis of the factors that lead to the appearance of compliance risk in the activities of commercial banks was conducted, alternative options were presented for the purpose of improving the administration of the compliance risk monitoring mechanism, and the most optimal measures were substantiated. In order to implement the project measure, a structural and logical model was developed and a detailed description of the measure was provided. As a result of the implementation of the project measure "Implementation of RegTech technology in order to improve the administration of the compliance-risk monitoring mechanism in the Branch of MTB Bank in the Ivano-Frankivsk region" the net income will increase by 5.1%, the total profit of the commercial bank will increase by 2.84%, decrease the value of the full cost price by 1.08%, and the share of fixed costs will decrease by 1.18% (from 22.8% to 21.62%). Keywords: administration, compliance risk, compliance risk monitoring mechanism. List of used literary sources: 11. Національний банк, Постанова «Про затвердження Положення про організацію системи управління ризиками в банках України та банківських групах» від 29 грудня 2020 року N 172 https://ips.ligazakon.net/document/view/pb18095?an=2057&ed=2020_12_29. 12. Гура, В. (2023). Система комплаєнс як спосіб подолання корупції. Економіка та суспільство, (52). https://doi.org/10.32782/2524-0072/2023-52-77. 13. Квасницька, Р. С., Кудрик, Н. В., & Хитра, О. Ю. (2022). Система комплаєнс-контролю: підходи до побудови, принципи й етапи функціонування. In The 5 th International scientific and practical conference “Modern science: innovations and prospects”(February 6-8, 2022) SSPG Publish, Stockholm, Sweden. 2022. 771 p. (p. 609). 14. Абрамова, А. (2022). Система ризиків діяльності комерційних банків в умовах цифровізації. Проблеми і перспективи економіки та управління, (4(28), 186–193. вилучено із http://ppeu.stu.cn.ua/article/view/262944. 15. Чмутова, І. М., Безродна, О. С., та Нечипоренко, Д. І. (2020). Методичний інструментарій оцінювання комплаєнс-ризиків фінансового моніторингу банків. Бізнес Інформб № 11б 296–309. 16. Світлична, В. Ю., Овчелупова, О. М. (2019). Сучасний стан та перспективи запровадження комплаєнс-контролю у діяльність банківських установ. Комунальне господарство міст, (153), 24-30. 17. Basel Committee on Banking Supervision Consultative Document The compliance function in banks. [Електронний ресурс]. Режим доступу: http://www.bis.org/publ/bcbs103.pdf. 18. Сівкова, К.О. (2018). Міжнародні стандарти організації комплаєнс-контролю в банках. Східна Європа: економіка, бізнес та управління, 6 (17), 582-586. 19. Foreign Corrupt Practices Act Clearinghouse. URL: http://fcpa.stanford.edu/index.html. 20. U.S. Department of the Treasury. URL: https://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA.aspx.