What is the middle 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.

Banking professionals in the middle office work directly with professionals in the front office, providing support for those roles that directly interface with the organisation’s clients.

Specific finance and accounting jobs such as product control (responsible for preparing daily P&L accounts for the traders) are considered to be middle office, as are risk management jobs and some technology roles (especially those that support on the trade floor).

Why are they important?

Middle office roles play a key role in supporting the front office, providing relevant and timely performance data, helping to analyse trading activity and mitigate risks as well as ensuring that the front office has access to the systems they need to respond quickly to their clients and the market.

Skills needed for this role

Individuals who work in the middle office need to be confident, proactive, logical and have excellent attention to detail. Relationship building skills are essential in order to achieve the trust of the front office and other colleagues. Flexibility and the ability to cope with ever-changing market conditions are mandatory requirements for this role.

Strategic Professional Options examinations linked to this role

Advanced Financial Management

Career opportunities presented by this role

Middle office roles offer excellent career prospects as skills are highly transferable. Roles in the middle office are often seen as a valuable gateway from practice or industry into the investment banking environment.

Competencies

High level competencies required include:

  • Advisory and consultancy

    A. Gathers and understands financial and non-financial information to develop complete knowledge of the client business and the environment in which it operates.

    B. Provides expert advice that will add value to the business and gain advantage.

    C. Identify and advise on business partnering to develop strategic relationships to create opportunities, improve performance and solve business problems.

    D. Prepare and present business plans and advise on the actions to implement these plans.

     

  • Corporate and business reporting

    A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.

    B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.

    C. Prepares financial statements for groups of entities using appropriate technologies.

    D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.

     

     

  • 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.

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.