Euromoney Learning Solutions

Finance Operations: Achieving Back Office Excellence

Available dates

Dec 2—6, 2019
5 days
London, United Kingdom
GBP 4995 ≈USD 6457
GBP 999 per day
Dec 7—11, 2019
5 days
London, United Kingdom
GBP 5245 ≈USD 6781
GBP 1049 per day
Jul 6—10, 2020
5 days
London, United Kingdom
GBP 5245 ≈USD 6781
GBP 1049 per day


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About the course

Financial services is reliant on strong & efficient operations

A prerequisite for a profitable, controlled and successful financial services business is a strong, stable and efficient operations function (‘back office’). Despite huge investments in computerisation over the last few decades in an attempt to achieve the highest level of automation or straight through processing (STP), experienced operations personnel are still required to deal with transactions which, for whatever reason, fall out of the automated process and require human intervention.

Over recent years, and certainly leading up to the financial crisis of 2008, the operations function in many financial services firms was degraded at a time when there was significant growth in activity both in terms of business volume and complexity. This was partly a result of the mistaken belief that the investment in computer systems would make the operations function more or less redundant.

This back office management course is intended to explain the relevance, importance and responsibility of the operations function in today’s international financial services industry whether in banks, broker/dealers, funds management, global custody etc. It will provide a comprehensive and generic understanding of the operational aspects of the financial markets and give participants the tools to identify the optimum approach to operations management and to achieving operational excellence. It covers the capital markets products and how, where and why they are traded and explains the different trading and investment strategies and how they are supported operationally. The course explains the market participants, how they interact and how they are structured so that attendees will have a sound knowledge of the ‘front to back’ processes.

The concept of straight through processing (STP) is analysed through the life cycle of various transaction types and the course explains what can go wrong and the operations controls required to ensure efficient transaction processing. The program will include an analysis of the inherent risks in the financial markets with particular focus on operational risk and how it may be identified and obviated.

This back office course will examine and compare the processes of outsourcing and offshoring and discuss the benefits and disadvantages of both and how an optimum result can be achieved.

Finally, the argument for the investment in a strong operational function will be made and that operations is not ‘just another cost’, but an important factor in the profitability and creditability of any financial services institution.

Attend this intensive and highly practical 5-day course and learn:

  • The role and importance of operations in the typical front, middle and back office structure
  • The roles and responsibilities in the back office
  • Internal and external relationship management and communication
  • The ‘Chinese Wall’ and segregation of duties and reporting lines
  • Operations as part of wider corporate governance
  • Operations, regulators and the impact of regulations
  • Operational resources and how they should be managed
  • Staff management and motivation
  • The concept of STP and why it can break down
  • Maintaining static data
  • What are ‘fails’ and fails management
  • Counterparty fails
  • How various trading/investment strategies can impact operations
  • An overview of the capital markets and products
  • The life cycle of transactions and how market participants interact
  • Operating in a multiple market, multiple product environment
  • Managing limits
  • Cash and collateral management
  • Operating in emerging markets
  • The back office as a revenue generator
  • Pre-emptive strategies to reduce risk, errors and costs
  • The end to end control process and the vital importance of reconciliation
  • How operational risk can be identified and measured with key risk indicators (KRIs)
  • Measuring performance (KPIs)
  • Operations and the avoidance of money laundering
  • Cause and effect analysis
  • Issue escalation
  • Management information systems and their use
  • The development and relevance of the ‘procedures manual’
  • Identifying and allocating operations and transactions cost
  • The ‘top’ versus ‘bottom’ line P&L
  • Operations and new business development
  • Operations role in project management and new systems implementation and managing ‘business as usual’ (BAU)
  • The benefits and disadvantages of outsourcing and offshoring
  • The request for proposal process (RFP) for ancillary services
  • Operations and business continuity planning (BCP)
  • Audit (internal and external)

Course Objectives

This course is designed not only for those embarking on or developing their careers in financial markets operations, but also for anyone who has an interest in the relevance of the operational function. It will benefit those who need to understand how the capital markets operate, what the operational risks are and how they can be controlled. You will be given a thorough and clear understanding of how transactions are processed, what can go wrong and the measures required to ensure the highest level of STP.

Participants will be provided with the tools necessary to achieve operational excellence.

Teaching Methodology

The teaching methodology used on this course combines formal theoretical instruction with frequent use of exercises and case studies. These are based on real situations experienced by the course director in his forty years involvement in this business. The course is intended to be interactive, with delegates encouraged to ask questions throughout. The course content is intended to give delegates an understanding that will be of immediate practical use in the workplace. The lecturer will be available throughout the duration of the course to offer additional help if required. Delegates will be divided into small teams to work together on the exercises that will include some simple calculations for which a calculator will be required. Each day there will be group discussions on issues identified by the participants.


Day 1

Operations in the Financial Services Industry

  • Overview: the development of operations pre and post 2008
  • A typical structure: front, middle and back offices
  • Roles and responsibilities
  • Reporting lines
  • The ‘Chinese Wall’, segregation of duties and conflicts of interests

Case Study: The downfall of Kidder Peabody

  • Internal and external relationships and communication
  • Operations and Corporate Governance
  • Managing resources and when to say ‘no’
  • The role of the operations manager and the delegation of duties
  • Maintaining morale and motivation
  • Training and staff development
  • The benefits and disadvantages of outsourcing and offshoring
  • Operations and the regulators and the impact of new regulations

Exercise: Delegates are asked, in their teams, to prepare an operations department organization chart for a broker/dealer business

Day 2

The Life Cycle of a Transaction and Straight Through Processing (STP)

  • An overview of capital market products
  • The market participants
  • Operating in multiple products and markets-they are not all the same!
  • Established versus emerging markets
  • The sequence and life cycle of a securities transaction
  • Trading and investment strategies and impact on operations
  • Communicating with the middle and front office
  • Trades processing
  • Limit management
  • The importance and maintenance of static data

Exercise: Delegates are asked, in their teams, to determine what static data is needed to set up a new account.

  • New accounts
  • New securities
  • Clearing
  • Settlement
  • CSDs
  • ICSDs
  • DvP, FoP
  • Global Custody
  • The concept of STP
  • What can go wrong?
  • Fails and Fails Management
  • Counterpart failure- ‘the chain is only as strong as the weakest link’
  • The back office as a revenue generator
  • The vital importance of reconciliations
  • Costs and cost allocation
  • Top versus bottom line profitability

Exercise: Delegates are asked, in their teams, to analyse a fail report and recommend actions.

  • Buy-ins
  • Interest claims
  • Corporate actions processing

Case Study: Losses from corporate action processing failure

Day 3

Operational Risk and Control

  • The Major Risks and how they are mitigated
  • Market Risk
  • Credit Risk / Global Credit Limit Systems
  • Definition of Operational Risk
  • What is operational risk?
  • What is an operational risk event?
  • What is an operational loss?
  • The impact of operational risk on the organization
    • Impact of operational risk on credit and market risk

Exercise: Participants are given the opportunity to consider the major risks in a Middle and Back Office environment. They are asked to identify 10 risks in the lifecycle of a securities trade

  • Measuring and managing Operational risk
  • Reporting lines and segregation of duties
  • Escalation of issues
  • The ‘whistle blower’
  • Audit, Compliance and Legal
  • Money laundering and the role of the MLRO
  • Operational risk exposure indicators
  • KRIs and KPIs
  • Loss identification / measurement / management / monitoring / reporting
  • Root cause analysis

Exercise: Given details of a failed transaction, participants will be asked to calculate an interest claim

Day 4

Control and striving for operational excellence

  • Pre-emptive strategies to reduce risk, errors and costs
  • The end to end control process
  • Pre-dealing / dealing controls / M.O. functions
  • Processing / position and payment controls
  • Reconciliation and accounting
  • Documentation, reporting and compliance
  • Investing in operations systems and people
  • Developing an operations control function
  • Management information systems and their use
  • The development and relevance of the ‘procedures manual’
  • Operations and new business development

Case study: New business implementation going wrong

  • Operations role in project management and new systems implementation and managing ‘business as usual’ (BAU)
  • The benefits and disadvantages of outsourcing and offshoring
  • The request for proposal process (RFP) for ancillary services
  • Operations and business continuity planning (BCP)
  • Audit (internal and external) and operations

Day 5

Making the case for investment in a strong operations function-course recap

  • The cost/benefit analysis for a strong operations function
  • The importance of experience
  • Having the ability to say "NO" sometimes
  • Avoiding reputation loss
  • The benefits and disadvantages of outsourcing and offshoring
  • The need for operation representation at the highest levels of management

Case study: Outsourcing going wrong

  • Group discussion
  • Course recap

Who should attend

  • Operations personnel from investment banks, broker/dealers, prime brokers, fund managers, pension funds global custodians etc.
  • Middle Office and Risk Managers
  • Product Controllers
  • Internal and External Auditors
  • IT developers (focused on operations)
  • Business Analysts and Consultants
  • Compliance staff
  • Regulators
  • Graduate and Management Trainees

Trust the experts

Richard Foster

The instructor has over thirty-five years senior banking operations management experience. He has been Head of International Operations at tier one firms including Morgan Stanley, Merrill Lynch and Prudential Securities. He was COO at Cresvale, an equity derivatives trading firm and a Founder Par...


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