“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 at once what exactly these people are doing. The same can be said about the specialists of the back and front offices. Who are they, where do they work, what is their direct responsibility?
Definition of the front office of a financial institution
This term refers to a group of units in organizations responsible for working with customers or customers. Specialists of the front office are at the forefront, this is the face of the company. The success of the entire institution depends on their professionalism, competence, friendliness. In the banking sector, such employees are engaged in processing applications for opening a deposit or obtaining a loan, advising on any issues, distributing banking products, etc. That is, specialists constantly accompany the client from the moment he arrives at the bank's office until the transaction is concluded.
What is a back office?
This is an operational and accounting unit that provides the work of the departments managing the assets and liabilities of the company. Back office is a gray cardinal. Clients and customers cannot appreciate the work of its specialists, although they put a lot of effort into the prosperity of the business. Such units are in banks, investment companies, organizations that make transactions in the securities markets. They work from 3 to 15 people, the number of employees depends on the size of the institution.
Work in the back-office of the bank involves the preparation of management reports, settlements on securities and cash on transactions concluded by the front-office. Also, its employees are involved in monitoring compliance with limits, maintaining an internal report, and providing information for accounting. A back office specialist works only with contractors, he does not cooperate with clients.
What does the middle office do?
This unit can be called the link between the front and back offices. Its functions are rather blurry. Bank specialists are mainly involved in drafting and signing agreements, providing clients with various types of reports, accepting orders for transactions involving the withdrawal of funds, purchase and sale, etc. The middle office is also responsible for coordinating standard forms and regulatory documents with other departments, developing methods conducting new operations. Its specialists in most cases work on the instructions of the foremost.
What are the responsibilities of back office professionals?
Employees of financial institutions must draw up contracts for the sale of securities, keep a register of transactions. The specialist monitors the re-registration of securities, since the transfer of ownership to the buyer from the seller should be made. The back office performs this procedure on the basis of a 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 seller and the buyer companies. The back office employee has a huge responsibility, because the smallest mistake, which at first glance seems to be a slight inaccuracy, can lead to large-scale problems. In the worst case, the company incurs significant losses due to invalidation of the transaction.
Comparison of front and back offices
These two divisions are opposite to each other. Front office is work with clients, the face of the company. Specialists are always in sight, the future of the organization depends on their professionalism and resourcefulness. Back office is work in the shade. Not everyone knows the employees of the unit by sight, but they are shoveling many important things like bee-toilers. 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.
Front office and back office have different functionality. The first is working to increase the speed of customer service, maintaining the reliability of the information received, the operational registration of sales. The second is focused on sales analysis, preparing a file of goods with prices, a pricing system, control of the movement of products in warehouses.
Separation of units can occur both at the software and hardware levels. There is no obvious boundary between them; it is just a system of concepts. Separation of back and front offices is necessary at the psychological level. The head of the company should understand that more professional and experienced specialists are required to work in the first subsystem than in the second, since they have a greater responsibility and are more difficult to work with.