What is a bank office. What is the difference between a front office and a back office? What is a back office, in simple words

What back office: origin and explanation of the term + 3 reasons why your company needs it + examples of back office tasks in 3 business areas + 2 types computer programs back-office + 3 problems they solve.

Many foreign words in the Russian language have become the definition of a certain field of activity. In the early 2000s, the concept of a back office appeared in the business industry.

Over the years, the term has been used in sales, financial institutions and the market. valuable papers.

What is a back office and what role does it play in modern business, you will learn from this article.

1. Explanation of the term "back office"

This expression came to Russian from English - "back-office" (which can be literally translated as "back-office"). Today, its meaning is a little vague, due to the fact that the back office units have many areas of activity that are radically different from each other.

A back office is a department in a company whose task is to formalize, register, record operations related to the company's finances.

Along with this, there is another, no less important department called the front office. What is it? The task of the front office is to conclude transactions and attract new partners, clients that influence the financial position and development of the company.

The back office includes the following departments:

• accounting,
• human Resources Department,
• company administration,
• support service, analysts,
• statistics, etc.

In fact, he deals with all administrative matters.

The front office, in turn, is a staff of managers who, in turn, attract new partners to the company.

2. How did the concept of a back office come about?

The history of the creation of such a popular term in business dates back to the usual building planning.

All buildings large companies were built according to one plan ...

The front office came first - the front side of the building. It was needed so that the client or visitor could easily find the right department or a specific employee. This room had an expensive renovation, because it is the "face" of the company. Employees should always be well dressed, behave politely with customers, etc.

The second part of the building was called the back office... All production and administrative work... Since the visitors had never been here, the renovation, lighting, and the interior were not presentable.

If the front office employees paid a lot of attention appearance, then the main role was played by professional quality company personnel.

Differentiation by the layout of the building has become a global term for the two divisions of any company. The front office is a vivid picture that attracts customers. The back office is the development department of the company, which monitors all processes.

3. Why does your company need a back office?

Start-up CEOs face the question of whether they need such a unit at all.

Its creation in a new firm or even in an existing one is important for 3 main reasons:

The reputation of the company.

Today, there is great competition in any field of activity. Back-office employees maintain the reputation of the company by their actions on a daily basis.

For example, specialists of the department of analytics and statistics make their mistakes every day in order to improve the performance of the organization.

The administrative department of the company constantly monitors that everyone does their job efficiently and as quickly as possible.

Increased profits.

Of course, front-office employees attract new clients, but without accounting support, any money transactions can increase income or, on the contrary, decrease it.

Moreover, it is in the back-office department that employees develop new development plans, which in the future can increase profits significantly.

Responsibility for risks in new transactions.

The front office managers' work is based on finding a major customer. At the same time, without miscalculations of all the benefits and possible risks from the transaction of back office workers, the contract will not be concluded.

This stage is the most critical, because it depends on it whether the company will receive profit or loss.

4. Back office tasks in 3 different business areas

Although the interpretation of the term is the same for all business sectors, in practice, in different areas of activity, employees perform tasks that differ.

3 examples of what exactly the back office is responsible for in different areas:

In a financial institution, this unit is the operations and accounting department, which is responsible for the operation of the entire organization. Specialists pay great attention to credit operations.

Also on their shoulders lies the responsibility for the execution of transactions related to securities, the work of the accounting department, control over the assets and liabilities of the bank.

Trade and sales.

In the field of trade and sales, the division is responsible and monitors all financial transactions, the arrival of goods, its sale, sale, transfer, write-off of balances, return of marriage, assessment and study trading market, purchase of equipment, premises for product sales, etc.

For workers in the field catering all the work of the department is related to current operations. Back-office assumes responsibility for drawing up a financial report, keeping records of products, control over the quality and preparation of dishes for customers, recruiting personnel.

5. Responsibilities of the back office worker

There are many specialists in this department and each of them has his own task. It is possible that newcomers firms have few employees, sometimes there may be only 5-10 of them. Therefore, you have to look for a universal worker, a specialist who can be responsible for several processes at once.

If you are in such a situation, then you should figure out what responsibilities a person from the back-office will have to fulfill.

The main duties of a specialist in this unit include:

1. Registration and registration of the transaction.
2. Conclusion of contracts related to the purchase or sale of goods.
3. Operations for the transfer of ownership from the seller to the buyer.
4. Control over the company's financial flows.

Almost all responsibility for the company's prosperity lies on the shoulders of the back office workers. The slightest mistakes in miscalculations of financial transactions and organizational issues can lead to losses or even.

6. Can the department be replaced with a back office program?

In the yard, whatever one may say, the XXI century is a time when most processes are automated (or, at least, tends to do so). This fate was not spared and the back office subsection.

Back-office is a computer program that controls and implements technological processes firms related to sales, finance, accounting, etc.

Many directors purchase these programs in order to save money on the salaries of employees of the administrative department.

There are 2 types of PC back-office:

For example, here is the Compact program, which is intended for a store. The database contains all the information about the work trading network... To use it, 2-3 people are enough, who will only control the work and enter new data.

Thus, you can solve the following issues much faster:

Fast customer service and new deals.

The program automatically makes miscalculations, determines possible risks, profit, loss, etc. At the same time, there can be no errors a priori if all data is entered into the program correctly.

Automatic accounting and control over the company.

When a company receives data on financial condition and statistics on the performance of all departments, this contributes to maximum control of the company's activities from the inside.

This information is needed so that management can control all processes, study shortcomings and eliminate them in time.

Analysis of cooperation with clients and partners.

Monitoring this information will help improve marketing strategy enterprises.

From this article, you learned what is back office, and also about the existence of computer programs that can replace an entire department with live employees. The program speeds up many organizational processes.

An overview of working with such an important element as

the back office of the company, in the following video:

This is undoubtedly a big plus for the work of the company, but then there will be no need for some specialists and people will have to be deprived of work. In addition, with all their accuracy, machines are not yet capable of surpassing people in many respects.

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In the financial environment, you can find many different terms, the meaning of which is unknown to most people, especially lay people who do not have any specialized knowledge in the field of finance. Our topic today is the back office. What is it for, what does this term mean and how exactly is the back office used in modern financial transactions? It is to these questions that full and detailed answers will be given.

The back office is a special operational and accounting unit that is responsible for ensuring the work and functioning of various divisions (departments) that are involved in the management of the company's assets and liabilities, as well as carry out activities in the financial markets.

What is the main task of the back office? The main mission of the back office is usually called documentary and electronic registration (as well as support) of transactions in the financial markets, which are concluded by dealers (also called traders) of the front office. In addition, other participants in the financial markets are also involved in similar transactions. Moreover, a back office is also needed in order to support analytical (internal) transactions between various departments of the company during the work of the system for the redistribution of financial resources.

The back office is usually located at some distance from the main office of the company, namely, where the office rental price and cost work force significantly lower. This is necessary in order to save and optimize all financial costs. In addition, in some cases, back office functions may be performed by other organizations. Also, the back office can be given almost entirely to the so-called "outsourcing". This is also done to save time and effort for headquarters staff. Significant financial savings can also be achieved in this manner.

Back office and front office

Back office and front office have a lot in common. For a better understanding, it will not be superfluous to familiarize yourself with how the back office and front office interact with each other.

So, the front office is most often used to designate departments that deal directly with clients and customers. Here, the interaction between the back office and the front office plays a special role, because the latter must have only fresh verified data, otherwise customers who receive inaccurate information can easily go to competitors.

Usually front offices can receive information directly from the back office, but this is not always the case, especially when it comes to large companies.

It is not uncommon for the concept of front office to be used as a contrast to the concept of back office. The fact is that some people understand the functions of the back office exclusively as providing support activities, however, the functions of the back office (as well as the front office) can be incomparably broader. In some cases, another term is used - middle office. It denotes divisions and departments that are busy checking and processing various transactions from customers.

The importance of back office in the financial market

As you know, on the financial markets there is nothing more than the mobilization of capital, as well as the provision of loans and the implementation of various exchange-money transactions + the placement of funds in the production of any product. It is the combination of supply and demand for funds of lenders and borrowers of various countries and states that forms what we call the financial market.

The back office plays a vital role in the functioning of the entire system of the world's financial markets.

Back office and capital market

The capital market is another field for the back office, because the capital market is one of the constituent parts of the financial market. It is on this market that the so-called "long money" circulates. Long money is cashthat circulate for more than one calendar year. With such a long period, the need for a back office increases many times over. Also in the capital market there is (in some way) a redistribution of free money supply, as well as their investment in any profitable financial and economic assets.

It should be added that the forms of circulation of financial resources can be very different. In each case, the back office plays a role.

Summing up, we can note the high importance of the back office at modern market financial services... Unfortunately, in some countries, the importance of the back office is still underestimated, but this trend is gradually coming to naught, because it is quite obvious to any competent financier that the back office is a reliable tool for leveling various kinds of risks that can threaten financial well-being even a thriving company.

There are three offices in any investment bank: Front Office, Middle Office and Back Office. In this article, we will tell you what it does and how each department works.

Front Office interacts directly with customers. The main task of Front office employees is to conclude transactions with institutional and private clients, which will bring profit to the bank and increase the assets of the clients themselves.

Front Office employees work for primary and secondary financial markets.

The investment bank's primary market includes a department corporate finance (IBD - Investment Banking Department), in which bankers provide advice and services for raising funds and restructuring clients' businesses. They deal with mergers and acquisitions (M&A), capital raising (Equity Capital Markets) and client debt restructuring (Debt Capital Markets).

The Secondary market consists of Trading, Sales, and Research departments. Front Office is characterized by strict separation of corporate finance and trading departments in order to limit the exchange of information between departments and to avoid conflicts of interests between the client and the bank through the use of inside information.

Front Office Feature:

· Work is associated with stress and constant stress - huge amounts of money depend on the decisions of employees, which they have to make in a short period of time.

· A lot of! A lot of work! Front Office employees are real careerists and workaholics. Working 80-100 hours a week is the norm for them.

· Work in the Front Office of an investment bank is one of the most prestigious and highly paid in an investment bank.

Middle Office deals with technical and administrative support. Inside it is divided into sections.

In the risk management department, analysts and risk managers work closely with the front office teams to provide them with up-to-date information on various financial products and financial markets. This information helps employees to minimize investment risks.

The financial statements are prepared by the product control department.

The Middle Office also includes a legal department (compliance), which monitors legal support of transactions and the requirements of the regulator - the Central Bank. They also manage legal risk by ensuring that the bank's practices adhere to laws and industry standards.

Liquidity, operational and reputational risks are managed by the treasury department.

Middle Office Feature:

· Great responsibility! If in the front office employees are more responsible for financial performance, then in the middle office they are responsible for the bank's compliance with all legal rules and requirements. The reputation of the bank largely depends on the quality of their work.

· Negotiating with the front office. Middle Office employees often have to warn the front office about high risks and convince them to abandon unreasonably risky deals.

Back Office- this is the department of transaction support, management and quality control.

The Operation & Settlement department is responsible for checking transactions for errors and customer payments.

Administrative functions include work with personnel (HR), marketing, brand formation and promotion, adherence to quality standards for the provision of services in all bank offices.

Also an important part of the back office is the IT department, which deals with issues technical support, improvement and automation of processes, correction of technical problems.

Back Office Feature:

· Normalized working hours as opposed to the front office.

· Interaction with other offices of the bank. International banks often bring together teams around the world to quickly address the challenges posed.

· Employees face constant work deadlines. Yet the work is not as stressful and intense as in the front office.

We will tell you more about the work of each Front office department in one of the following materials.

/ Your tPeople team /

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reference

Back Office - a branch that exists in banks, investment companies and other organizations that transact in the securities market. Such an organization can number from three to fifteen people. It depends on the volume and turnover of the back office. The back office works in accordance with regulations Federal Securities Commission (FCSM). Accordingly, each specialist in this department must know and strictly observe these requirements.

Description of activities

The activity of a back-office specialist is a documentary registration and support of a transaction concluded by traders (exchange trading specialists) of counterparty companies (front-office). IN russian companies back office specialists are engaged in the purchase of securities from individuals.

Wage

average in Moscow:

Labor responsibilities

The back office specialist maintains a transaction log. Draws up contracts for the purchase and sale of securities of a certain issuer. Under the concluded agreement, he carries out re-registration of securities, that is, the transfer of property rights from the seller to the buyer. Draws up a transfer order when concluding an agreement or directly in the register of securities. After re-registration and receipt of a document confirming the rights of the new owner to the block of shares (extract), the back office specialist controls the settlement process of the buyer's company with the seller company.

Features of career growth

A back office specialist can take the position of a leading back office specialist with a career perspective to the position of deputy head of department.

What is back office and front office? What are their functions and differences?

Front office (English front office) is structural subdivision a company whose competence includes, first of all, working with clients and for clients, rather than performing secondary ones, such as service support, risk management, acceptance of complaints, and other ordinary operational processes.

The name of this division of the company is due to the fact that the front office staff is always in front, in the sight of clients, while the service staff is "invisible" to consumers, and they may not even know about its existence.

In companies of various profiles, the front office includes different types activities. For example, in financial corporations the front office is responsible for such areas as sales (sales), trading (trading), mergers and acquisitions (M&A).

Front office managers are those who directly contribute to the company's profit. Some question the equity research function because such analysts do not directly do the work that makes money, such as the sales force, for example. This is not the case, however, as asset analysts have to see clients face to face more often than anyone else. Meanwhile, traders almost never see their clients live, but nevertheless they work in the front office.

Traditionally, positions in the front office are more prestigious and highly paid than in the back office. IN investment banks and other financial institutions, getting to work in the front office is the most difficult. There are very high requirements for both formal education and personal qualities.

Back office (English back office) - these are departments, departments of the corporation that perform routine, administrative, serving the functions of managing the business as such. The back office functions also include IT (database administration, support service), accounting, HR. Statistical and analytical accounting of sales, purchases, warehouse balances, archiving - all this can also be within the competence of the back office. In banking institutions, the tasks of the back office include clearing operations, current settlement and cash services, etc.

The term back office comes from the times when the layout of company premises was such that the front office was visible in the foreground (so that customers could easily and quickly enter the company and find the right employeewhich they dealt with), while the backyard housed the actual production, administrative offices, product development and testing departments, warehouses, etc. Needless to say, the management of the companies has always strived to make the front office make the best impression. To do this, they made expensive repairs there, invested money in interior design.

The back office area was often dingy, gloomy and not very well maintained. They did not pay much attention to her presentability. clients did not show up there anyway. However, back office staff in most cases make the greatest contribution to the development of the company. Today the back office is not necessarily geographically located near the headquarters. On the contrary, they are trying to transfer it to where the costs are lower (for example, to the countries of Southeast Asia). Also today, it is not uncommon for the functions performed by the back office to be outsourced.

The importance and significance of the back office is often underestimated. However, its role is valuable to business success for at least three reasons:

1. Maintaining the company's reputation. In a highly competitive environment, a company's reputation is extremely important. Back office employees, by doing their job, also support the name of their company. For example, call-center, service support specialists, service personnel, while communicating with customers, leave a favorable impression, strive to fully satisfy their wishes.
2. Management of risks. As a rule, top managers lazily read ready-made financial or other reports, not really thinking about what kind of work and effort it cost ordinary workers. Insofar as management decisions are accepted on the basis of data, facts, calculations, figures, then their accuracy and correctness is extremely important. Accordingly, those who enter the initial data and make calculations perform very responsible work and reduce the risk for the top echelon of making an ineffective decision.
3. Reward. Although back office workers do not directly generate money for the company as they do in the front office, they can nevertheless negate the efforts of their colleagues with ineffective activities and solutions. In addition, new methods of saving or rationalization proposalsoffered by the back office can directly or indirectly increase the company's profits.

If we move away from the management terminology and speak a little cynically, then the front office is the tough guys in expensive suits, slightly arrogant and too self-confident. The front office has a more presentable and representative appearance than the back office. The front office employees are confident that they are the most important, and the back office is a periphery, a gray area, a place for dull, mediocre personalities. Salaries and bonuses differ accordingly.

Today, the terms back office and front office are most commonly used in the context of investment banking, where this division is most clearly expressed.