People working in middle and back office (also know as operations), unlike front office, don’t liaise with customers to generate revenues and profits for the bank. Operations run as a support function to the front office (the revenue generating activities).
Middle Office includes the following activities:
- Compliance – responsible for an investment bank’s daily operations’ compliance with FSA regulations and internal regulations. Often also considered a back-office division.
- Risk Management – involves analyzing the market and credit risk that traders are taking onto the balance sheet in conducting their daily trades, and setting limits on the amount of capital that they are able to trade in order to prevent ‘bad’ trades having a detrimental effect to a desk overall. Another key Middle Office role is to ensure that the above mentioned economic risks are captured accurately (as per agreement of commercial terms with the counterparty), correctly (as per standardized booking models in the most appropriate systems) and on time (typically within 30 minutes of trade execution).
- Finance – responsible for an investment bank’s capital management and risk monitoring. By tracking and analyzing the capital flows of the firm, the Finance division is the principal adviser to senior management on essential areas such as controlling the firm’s global risk exposure and the profitability and structure of the firm’s various businesses.
Back Office includes the following activities:
- Operations involve data-checking trades that have been conducted, ensuring that they are not erroneous, and transacting the required transfers. It is a critical part of the bank that involves managing the financial information of the bank and ensures efficient capital markets through the financial reporting function.
- Technology refers to the IT department. Every major investment bank has considerable amounts of in-house software, created by the Technology team, who are also responsible for Computer and Telecommunications-based support. Technology has changed considerably in the last few years as more sales and trading desks are using electronic trading platforms. These platforms can serve as auto-executed hedging to complex model driven algorithms.
- Human Resources covers all activities involving the personnel of the bank.
- Marketing involves the promotion and PR of the investment bank and its products.
How do I get a graduate scheme / internship / entry level job or career in Back & Middle Office?
Obtaining a graduate scheme, internship or entry level role in back & middle office can be very challenging and competitive – though very achievable by getting your application, CV, interview and general approach right. You can guarantee that ninety percent of applicants for back & middle office roles will not know how to apply, so getting your application in the top ten percent makes things a lot more achievable.
Approaching the company in the right way will make all the difference. Combining the right approach with a strong interview (and in some cases assessment centre) writ a strong focused tailored CV will go a long way. Make sure you have gone through the free videos on this sight by entering your name and email address in the top right of this screen underneath the video. Once you have filled this in you will have instant access to everything you need to secure your career in back & middle office.
Roles in Back & Middle Office:
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Human Resource
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Risk Management
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Settlements / Operations
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IT in Banking & Finance
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Marketing in Banking & Finance
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Compliance
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Financial Media / Journalism
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Financial Recruitment
Top 10 Graduate Recruiters in Back & Middle Office (In no order)
- Morgan Stanley
- Goldman Sachs
- UBS
- BNP Paribas
- Barclays Capital
- JP Morgan
- Deutsche Bank (Commerzbank)
- Credit Suisse
- Bank of America Merrill Lynch
- Citi Group
