What is the back office and what does it do?

Although somewhat dated, the terms, 'front office', 'middle office' and 'back office' are often used to describe career opportunities available in investment banks and other financial institutions

Back office in an investment bank usually refers to the support departments that do not directly support the front office on a day to day basis (roles that directly support the front office are known as ‘middle office’). Examples of support function back office roles include HR, administration and centralised finance and IT functions.

Back office may also refer to process led functions focused on the downstream implementation of the trades and transactions of the front office. Trade support and settlements are good examples of this type of back office role. Professionals in this field are responsible for making sure that payments for trades are processed and that exceptions are identified and analysed.

Why are they important?

Back office roles provide the structure on which the rest of the bank operates. They play a key role in ensuring that the organisation’s systems are operating correctly, that people are being supported effectively and compliantly and that trades are settled properly.

Skills needed for this role

Back office roles typically require individuals who are organised and numerate with an excellent attention to detail.

Strategic Professional Options examinations linked to this role

Advanced Financial Management

Advanced Performance Management

Career opportunities presented by this role

Investment banks have a highly structured career path which allows successful individuals to progress quickly. Skills are highly transferable and the experiences gained in financial services have value in other sectors.

Competencies

High level competencies required include:

  • Data, digital and technology

    A. Identifies strategic options to add value, using data and technology.

    B. Analyses and evaluates data using appropriate technologies and tools.

    C. Applies technologies to visualise data clearly and effectively.

    D. Applies scepticism and ethical judgement to the use of data and data technology.

     

  • Financial management

    A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.

    B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.

    C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.

    D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.

    E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.

  • Governance, risk and control

    A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C. Identifies and manages risk appropriately.

    D. Uses risk management for the best interests of an organisation and its stakeholders.

    E. Monitors and applies relevant legislation, policies and procedures.

  • Management accounting

    A. Applies development and performance management, in the wider business and technological environment, within the context of strategic planning and implementation.

    B. Directs organisational performance through the selection and measurement of financial and non-financial performance indicators.

    C. Collaborates on the key tactical and organisational areas of budgeting and control, capital investments, people and resource management.

    D. Consults on the design and use of current and emerging technology and information systems to improve strategic decision-making and organisational performance.