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Front Office vs Middle Office vs Back Office

08 November 2022

Financial services companies have a diverse range of needs that require different professionals to be able to operate successfully in front, middle and back office functions. Although each area differs from the other two considerably, they are equally as important to a firm’s success.

With this being the case, failure to choose the right individuals to deal with each respective function can severely inhibit an organisation’s growth. To prevent this from happening, therefore, it is vital to understand the differences between the front office vs middle office vs back office. What roles do they play and what services are they responsible for?

What is the difference between the Front vs Middle vs Back Office?

As important as each office is, some may struggle to understand the differences between the front office vs middle office, between the middle office vs back office and between the front office vs back office. To dispel this confusion, we shall demonstrate how the offices differ from each other by covering their respective roles.

The Front Office

The front office is responsible for generating income within an organisation. As a result, they are often in contact with clients directly.

When it comes to financial services, the front office is involved in providing personal client services like wealth management and consulting.

The following are some examples of Front Office Functions:

Corporate

This team is responsible for ensuring a business continues to grow and keep pace with its competitors. A corporate team will usually include the most senior positions in a firm, such as the Chief Executive Officer, Chief Financial Officer, and Chief Information Officer, among others.

Sales

Members of the sales team are often the first point of contact when it comes to dealing with clients. Among their duties, they are responsible for generating relationships with their business’s customers.

Naturally, the success of these relationships is vital to generating the revenue that allows a firm to pay its operating costs, in addition to generating the financial means to expand the company’s presence in its chosen market.

The Middle Office

While the front office is responsible for generating business revenue, the middle office is largely responsible for ensuring that the company doesn’t lose money.

The following are some examples of Middle Office Functions:

Risk Management

The Risk Management team is responsible for spotting potential threats. If these threats are not dealt with properly, they can end up causing severe damage to the firm’s good name.

Information Technology

The Information Technology team are responsible for ensuring that a company’s technology is properly maintained and upgraded. They also deal with problems caused by technology such as faulty software.

The Back Office

Finally, the back office provides the services that help a business to operate. Unlike the front office, their work is largely unseen. Generally speaking, this is the biggest difference between front office vs back office finance. Likewise, the unseen nature of their work is also a key distinguisher of the difference between the middle vs back office.

The following are some examples of Back Office Functions:

Accounting

The accounting team is responsible for recording a firm’s financial activities. This is important as a company will be subject to scrutiny by multiple entities, including state tax collection authorities. If the accounting team makes an error, the company can be liable for a heavy fine and subsequent reputational damage.

Human Resources

Human Resources are responsible for handling a firm’s employees. Their range of duties includes recruitment and onboarding, but they are also responsible for duties such as employee benefits and disciplinary procedures.

What can Apex Group do for you?

We hope we have cleared up the differences between the front office vs back office vs middle office. However, an understanding of the functions of each office is useless if you don’t have the right people to run each service.

That’s where Apex Group comes in. We appreciate the centrality of all three offices to the success of a business. That’s why our Middle Office solutions enable your firm to outsource all three of these offices to the degree that suits you best.  

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