Lesson 9: Front Office, Middle Office and

Back Office

AILENE S. BOBIER
Faculty, Computer Studies Department College of
Sciences
Palawan State University – Main Campus
Topics
▪ What is Front-Office? Its characteristics?
▪ What is Middle Office? Its characteristics?
▪ What is the Back Office? Its characteristics?
Introduction
There are a number of divisions that make up an
investment bank, usually divided into ‘front office, ‘middle
office’and ‘back office’.
 Front Office: bringing in the bacon
Front office roles exist to generate revenue for the bank and make as
much profit as possible for their clients. Traders, brokers, asset
managers, researchers, and sales and structuring professionals are
the key players of the front office line up.
 Front Office
• Modern front office roles are a far cry from the incessant shouting
down phones in years gone by.

• Researchers will investigate potential markets and investment

opportunities for clients to inform pitches and asset management,
whilst the traders and brokers make the trades themselves.
 Characteristics of the front office
• High pressure! There are big decisions to be made in short time frames that
could either make or lose huge amounts of money.

• Long working hours. 80-hour weeks are not uncommon!

• These roles generally have the highest salaries in investment banking –
indeed, they’re some of the most highly paid career paths out there!
 Middle office: the voice of reason
• In investment banking, the middle office usually consists of risk
management, research, and compliance departments, as well
as some elements of technology.

• Risk analysts and managers work closely with front-office teams

to feed them their results relating to various asset classes and
financial markets.
 Middle office: the voice of reason
• Developers and some types of quantitative analysts work on the
creation and maintenance of software and applications used by
traders and brokers.
• Financial control is also part of the middle office – it’s
essentially in the accounting department for the bank, preparing
financial statements for reporting to industry regulators, etc.
 Characteristics of the Middle Office
• Huge responsibility! These guys are responsible for making sure
the bank doesn’t breach regulations and put its financial position
and reputation at stake.

• Challenging negotiations. Middle office needs to convince front

office not to get carried away with risky investment, whilst giving
them the room to make the most lucrative moves they can.
 Back office: the engine room
• The back office is namely referred to as ‘operations’. This
includes all of the services and duties that must be carried out when
trades are made by the front office: clearing and settlement. There
are many administrative roles, which play a vital part in the overall
functioning of the bank – and the world of trading overall, for that
matter!
 Back office: the engine room
• It’s not just about clearing and settlement services either. A bank
is, after all, a business like any other, with staff to take care of, an
image and brand to mold and promote, and a need to source the
very best talent for their roles, from graduate intake up to the most
senior roles.
• Technology forms part of the back office too. A modern bank
 Characteristics of the back office
• More standard office hours compared to the front office.
• An international dynamic. Multinational investment banks often unite their
operations teams across the globe to get tasks done and problems
solved as quickly as possible.

• There are still essential deadlines to meet, though the heat of the working
environment may not be as intense as in the front office.
 References
• Front (n.d). Front Office, Middle Office and Back Office Explained
.https://www.allaboutfinancecareers.co.uk/industry/inve stment-
banking/front-office-middle-office-and-back- office-explained

• https://youtu.be/EkeCBMGuV_Q