Finance Operations: Achieving Back Office Excellence

Euromoney Learning Solutions

How long?

  • 5 days
  • in person

Euromoney Learning Solutions


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About the course

Attend this course to understand how to manage a strong & efficient operations function

A prerequisite for a profitable, controlled and successful financial services business is a strong, stable and efficient operations function (a.k.a. the “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 includes the capital markets products and how, where, and why they are traded, explaining the different trading and investment strategies and how they are supported operationally.

You will also gain a deeper appreciation of the operational aspects of the financial markets, how inherent risks can be identify and obviated, and the tools available to help you achieve operational excellence. Finally, the argument for the investment in a strong operational function will be made and that operations is not “just another cost”, but an critical 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


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


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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Finance Operations: Achieving Back Office Excellence at Euromoney Learning Solutions

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