Operational Efficiency in Finance

Euromoney Learning Solutions

How long?

  • 5 days
  • in person

Euromoney Learning Solutions


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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

About the course

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

Discover how to achieve the optimum level of operational efficiency and control in the international financial services industry.

Course Description

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.

The Covid 19 pandemic has changed the way of working for many of those engaged in financial services operations. Working from home has become the new norm and while global financial activity and transactions have continued virtually unabated, the risks and benefits of remote working have yet to be fully analysed. In this course, we will examine the impact on operations management and controls and the welfare of operations personnel in these difficult times.

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 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 ensuring 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.

The 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
  • The impact of the Covid 19 pandemic on financial services operations
  • 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)
  • Operations is not ‘just another cost’

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 planned 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 One


Operations in the Financial Services Industry

  • The international capital markets
  • Overview: the development of operations pre and post 2008
  • Group discussion-The impact of the Covid 19 pandemic on Operations management and risks and benefits of remote working
  • Market participants

Exercise: Balance Sheet

  • A typical structure: front, middle and back offices
  • Roles and responsibilities
  • Reporting lines
  • The ‘Chinese Wall’, segregation of duties and conflicts of interests

Case Studies: Segregation of duties: Barings Bank/Kidder Peabody

  • Internal and external relationships and communication
  • Operations and Corporate Governance
  • The role of the Operations manager
  • Areas of potential conflict
  • Money laundering
  • Operations and internal/external communications
  • KYC
  • Choosing service providers and RFPs
  • The benefits and disadvantages of outsourcing and offshoring

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

Day Two

Banks and the Banking Industry

  • Commercial/Retail Banks
  • Investment Banks
  • Central Banks
  • Shadow banking
  • Electronic banking

International Capital Markets-Participants

  • How market participants interact
  • Individual investors
  • Broker/dealers
  • Funds management
  • The role of the market maker
  • Corporate treasury
  • Issuers

International Capital Markets-Products and Markets

  • Over the counter (OTC) vs. exchange traded
  • Money market instruments
  • Fixed income
  • Equities
  • Derivatives
  • FX
  • Rating agencies
  • New Issues and the new issue process
  • IPOs

Exercise: Prepare a ‘tombstone’ for a new issue

International Capital Markets - strategies

  • Investment goals
  • Basic trading strategies-Long, short, hedge, arbitrage
  • Securities lending and repo

Exercise: Analyse a trade report

Day Three

Transaction Processing and STP

  • Understanding straight through processing
  • The life cycle of a trade
  • Static data
  • Standard settlement instructions (SSIs)
  • New Accounts and KYC
  • Trade input
  • Reconciliations
  • Mark to Market
  • Limits

Exercise: Calculate realised and unrealised P&L

  • Settlement
  • Clearing vs. settlement

Day Four

Transactions-What can go wrong and solving problems

  • STP breaking down

Exercise: Discuss ways in which STP can break down

  • Transactions costs
  • What can go wrong?
  • Fails and Fails Management

Exercise: Analyse a fail report

  • 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
  • Precautions
  • Escalation of problems
  • Internal control standards
  • Internal control
  • Procedures and procedure manuals

Corporate Actions

  • What is a corporate action
  • Managing corporate actions

Cash and Collateral management

  • The cash management function
  • Cash management-key objectives
  • What is collateral
  • Collateral usage and the importance of collateral management

Market regulation in the aftermath of 2008

  • The regulatory landscape
  • EMIR, Dodd Frank
  • Regulation and central clearing
  • Basel III
  • What now for market regulation after the Covid 19 pandemic?

Day Five

Risk and Risk and Management

  • Risk and the operations function
  • The risk universe
  • Lessons learned?
  • The risk categories
  • Major risk categories defined
  • The impact of risk
  • Market risk
  • VaR
  • Credit risk
  • Systemic risk

Exercise: Discuss ways to mitigate the main risk categories

  • Defining operational risk
  • Causes, event, effects of operational risk
  • Loss event categories
  • Principles of operational control
  • Key risk indicators (KRIs)
  • Key performance indicators (KPIs)
  • The responsibility of the individual

Systems Development and Project Management

Case study: The Lloyds TSB IT meltdown

Achieving Operations Excellence

  • Staff management in the Covid 19 environment
  • Resource management
  • Recruitment
  • Training
  • Operations management

End of Programme

  • Q & A
  • 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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Operational Efficiency in Finance at Euromoney Learning Solutions

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Coursalytics is an independent platform to find, compare, and book executive courses. Coursalytics is not endorsed by, sponsored by, or otherwise affiliated with any business school or university.

Full disclaimer.

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