“All professions are needed, all professions are important” - we all know this from childhood. The fact is that in the modern world everything is interconnected, so many terms of foreign origin have appeared, the meaning of which is unknown to most citizens. Realtors, image makers, copywriters, surveyors - you can’t tell right away what exactly these people do. The same can be said about back and front office specialists. Who are they, where do they work, what are their direct responsibilities?
Definition of a financial institution's front office
This term refers to a group of departments in organizations responsible for working with customers or clients. Front office specialists are on the front line, they are the face of the company. The success of the entire institution depends on their professionalism, competence, and friendliness. In such employees, they process applications for or obtain a loan, advise on any issues, distribute banking products, etc. That is, specialists constantly accompany the client from the moment he arrives at the bank branch until the conclusion of the transaction.
What is a back office?
This is an operational and accounting division that ensures the operation of departments that manage the assets and liabilities of the company. The back office is an eminence in gray. Clients and customers cannot evaluate the work of its specialists, although they invest a lot of effort in the prosperity of the business. There are such divisions in banks, investment companies, and organizations that carry out transactions in the securities markets. They employ from 3 to 15 people, the number of employees depends on the size of the institution.
Working in the back office of a bank involves preparing settlements for securities and funds for transactions concluded by the front office. Its employees are also responsible for monitoring compliance with limits, maintaining internal reports, and providing information for accounting. A back office specialist works only with counterparties; he does not collaborate with clients.
What does the middle office do?
This division can be called the link between the front and back offices. Its functions are quite vague. Bank specialists are mainly involved in drawing up and signing contracts, providing clients with various types of reports, accepting orders to carry out withdrawals, purchases and sales, etc. The middle office is also responsible for coordinating standard forms and regulatory documents with other departments, developing methodologies carrying out new operations. Its specialists in most cases work on assignments from frontline workers.
What are the responsibilities of back office specialists?
Employees of financial institutions must draw up agreements for the purchase and sale of securities and keep a log of transactions. The specialist monitors the re-registration of securities, since the transfer of ownership rights to the buyer from the seller must be made. The back office carries out this procedure on the basis of the transfer order contained in the register of the securities holder.
The new owner must receive all the necessary documents, and the specialist, in turn, controls the settlement process between the companies of the seller and the buyer. The back office employee has a huge responsibility, because the slightest mistake, which at first glance seems like a minor inaccuracy, can lead to large-scale problems. In the worst case, the company suffers significant losses due to the deal being declared invalid.
Comparison of front and back offices
These two divisions are opposite to each other. The front office is the face of the company. Specialists are always visible; the future of the organization depends on their professionalism and resourcefulness. The back office is work in the shadows. Not everyone knows the employees of the department by sight, but they are like busy bees, shoveling many important matters. All specialists work for the benefit of the company, but it is still important to draw a line between different departments so as not to shift the responsibilities of some onto the shoulders of others.
The front office and back office have different functionality. The first one works to increase the speed of customer service, maintain the reliability of the information received, and promptly register sales. The second is focused on sales analysis, preparing a card index of goods with prices, a pricing system, and monitoring the movement of products in warehouses.
The separation of divisions can occur both at the software and hardware levels. There is no obvious boundary between them, it is just a system of concepts. The separation of back and front offices is necessary on a psychological level. The head of the company must understand that more professional and experienced specialists are required to work in the first subsystem than in the second, since they have greater responsibility and more complex work.
Back-office English back-office
a division of a bank or brokerage company that performs operations on execution, accounting and registration of transactions with securities, settlements with clients; in contrast to the front office, where transactions are directly concluded.
Dictionary of business terms. Akademik.ru. 2001.
See what “Back Office” is in other dictionaries:
An operational accounting unit that ensures the work of units involved in managing the assets and liabilities of an organization operating in financial markets. The task of the back office is documentary and electronic processing... Wikipedia
back office- The part of the company responsible for activities related to completed transactions. Depending on the organizational structure of the company, the back office can be one department or consist of many structural divisions (such as: related to... ... Technical Translator's Guide
back office- back office, back office... Together. Apart. Hyphenated.
"BACK OFFICE"- 1. banking division, a department of a company that performs various documentary operations in the operating rooms for servicing foreign economic activity or operations with securities; 2. departments of the company that collect, process and... ... Great Accounting Dictionary
back office- auxiliary financial and settlement services that support the life of the company (especially in a bank) ... Dictionary of business slang
BACK OFFICE- a banking division, a department of a company that performs various documentary operations in the operating rooms for servicing foreign economic activity or operations with securities... Large economic dictionary
BACK OFFICE- (English back office) is a term used to describe the internal interface (means and rules of interaction in a banking computer system) in departments of a bank or other financial institution whose employees do not participate... ... Financial and credit encyclopedic dictionary
Back office- A division of a brokerage company that performs office operations that support, but do not include, trading in stocks and other securities. These transactions include all possible written confirmations of transactions and their liquidation,... ... Investment Dictionary
Back office- - a division of a brokerage company that ensures the execution of transactions after their conclusion and carries out internal accounting and control of transactions with securities... Stocks and bods market. Glossary of basic terms and concepts
Back office in business architecture A set of business processes, procedures, normative documents (regulations), reference books, printed forms, organizationally staffed units that implement journal (register) accounting of transactions performed ... ... Wikipedia
Books
- Back office of operations with securities in a bank and investment company, Yu. Yufryakov. 155 pp. The book is devoted to the issues of creating and organizing the work of a securities back office. Based on my more than ten years of experience in the largest Russian investment...
What is Back Office
Back office is a term that refers to that part of business operations that are aimed at solving problems necessary for the normal functioning of the company. This definition comes from the tradition of placing technical and other non-public departments at the rear of a business facility.
What is a back office, in simple words.
In simple words, the back office is the company’s employees who do not interact with the public. They provide all the technical activities of the company, which are usually hidden from view. Examples include departments such as accounting, IT department, warehouse workers, and so on.
Main components of business.
Traditionally, almost any business consists of several areas that form a holistic and operational structure of the company. Each of the areas strictly performs its tasks to ensure the work of other departments.
Company architecture:
- Front office;
- Middle office;
- Back office.
Now let's look at each sector in more detail.
Front office- This is the area of the company that is responsible for direct interaction between customers and sellers. This can include: salespeople, sales managers, consultants, investment brokers, traders, and so on. In general, this category includes those employees who directly bring income to the company, who, so to speak, make real money. In addition to specific specialties, the front office is usually called the showcase of a commercial website, in particular an online store.
Middle office- This is the field of activity in which administrative and managerial personnel work. This may include analytical departments, financial management departments, marketing specialists, and so on.
Back office is an area that does not directly generate revenue for the business, but rather provides vital support and administration. These include: human resources department, accounting, logistics, technical personnel, postal and warehouse departments, IT department. By analogy with the front office, the internal administrative part of the site, to which ordinary users do not have access, is usually called the back office. Sometimes there are options for using the term back office as a definition of a personal account in a particular Internet project.
What is the difference between front office and back office?
Having read the above short definitions of these areas of employment, we can conclude that the main difference lies in public interaction with clients. It should be noted that there is no significant difference in salaries between these niches. In this matter, a specific profession and the responsibilities assigned to a person play a significant role.
Middle office
Middle office in the financial sector, the general name for a group of departments or processes responsible for verifying and directly processing client transactions. Unlike the front office, middle office workers, as a rule, do not have direct contact with clients, but at the same time carry out operations directly related to the clientele, for example, checking borrowers for creditworthiness, entering data into information systems obtained from front office in an unstructured form, invoice services, control risks associated with a specific transaction.
The concept of the middle office originated in the banking industry in the early 1990s with the aim of bridging the information gap between the front and back office.
Wikimedia Foundation. 2010.
See what “Middle Office” is in other dictionaries:
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Middle East Times Format Print and electronic Owner Sun Myung Moon Editor-in-Chief Ramez Malouf Founded 1983 Political affiliation ... Wikipedia
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Front office in business architecture A set of business processes, procedures, normative documents (regulations), reference books, printed forms, organizational staff units that ensure interaction with the client on the part of the enterprise (in ... Wikipedia
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This is the most general and comprehensive representation of an enterprise as an economic entity that has short-term and long-term goals for conducting its core activities, defined by a mission in the regional and global market, and a development strategy... Wikipedia
Based on the mission, development strategy and long-term business goals, determines the necessary organizational structure, sales channel structure and functional model of the enterprise, documents used in the development and implementation process... ... Wikipedia
Information repository in system architecture A set of information systems, including databases and directories, that implement functionality for describing metadata, collecting, cleaning, enriching, consolidating primary information from ... ... Wikipedia
Reporting in system architecture A set of information systems, including databases and directories, that automate the construction of reporting based on data from an information repository. Examples of reporting systems: management system... ... Wikipedia
There are three offices in any investment bank: Front Office, Middle Office and Back Office. In this article we will tell you what each department does and how it works.
Front Office interacts directly with clients. The main task of Front office employees is to conclude transactions with institutional and private clients that will bring profit to the bank and increase the assets of the clients themselves.
Front Office employees work in primary and secondary financial markets.
The primary market of an investment bank includes a corporate finance department (IBD - Investment Banking Department), in which bankers provide advice and services on attracting financing and restructuring clients’ businesses. They are involved in mergers and acquisitions (M&A), capital raising (Equity Capital Markets) and debt restructuring of clients (Debt Capital Markets).
Secondary market consists of trading (Trading), sales (Sales) and analytics (Research) departments. Front Office is characterized by strict separation of corporate finance and trading departments in order to limit the exchange of information between departments and to avoid conflicts of interest between the client and the bank through the use of inside information.
Front Office Features:
· Work is associated with stress and constant tension - huge amounts of money depend on the decisions employees are forced to make in a short period of time.
· A lot of! A lot of work! Front Office employees are real careerists and workaholics. Working 80-100 hours a week is the norm for them.
· Work in the Front Office of an investment bank is one of the most prestigious and highly paid in an investment bank.
Middle Office provides technical and administrative support. Inside it is divided into departments.
In the risk management department, analysts and risk managers work closely with front office teams to provide them with updated and up-to-date information about various financial products and financial markets. This information helps employees minimize investment risks.
The preparation of financial statements is carried out by the quality control department (product control).
The Middle Office also includes a legal department (compliance), which monitors the legal support of transactions and the requirements of the regulator - the Central Bank. They also manage legal risks, ensuring that the bank's practices comply with legislation and industry standards.
The treasury department manages liquidity, operational and reputational risks.
Characteristics of Middle Office:
· Great responsibility! If in the front office employees are more responsible for financial performance, then in the middle office they are responsible for the bank’s compliance with all legal rules and requirements. The bank's reputation largely depends on the quality of their work.
· Negotiating with the front office. Middle Office employees often have to warn the front office about high risks and convince them to abandon unreasonably risky transactions.
Back Office is a department for transaction support, management and quality control.
The Operations & Settlement department checks transactions for errors and customer payments.
Administrative functions include working with human resources (HR), marketing, building and promoting a brand, and maintaining quality standards for the provision of services in all bank offices.
Also an important part of the back office is the IT department, which deals with technical support, improvement and automation of processes, and correction of technical problems.
Back Office Feature:
· Standardized work schedule in contrast to the front office.
· Interaction with other bank offices. International banks often bring together teams around the world to quickly solve problems.
· Employees face constant work deadlines. And yet the work is not as stressful and intense as in the front office.
We will tell you in more detail about the work of each Front office department in one of the following materials.
/Your tPeople team/
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