Regulatory change, advancements in technology, and outsourcing, have transformed how banks manage themselves and manage risk. The lines between intraday needs, and traditional end-of-day processes continue to blur as real time accuracy and tight internal controls have become a competitive necessity.
The alignment of an aggressive front office with a sturdy and strong middle office is crucial regardless of whether your back office is internal or outsourced. The middle office resides somewhere between the front office and the back office. Middle office structures are dissimilar.
Pohl Consulting and Training can help you define, create or consolidate a middle office that makes the most sense for your organization. We assist in the design or streamlining of organizational structures and the training of management and line staff.
An efficient middle office requires clear definition of what rules, reviews and approvals are required to run your organization. Pohl Consulting and Training can help break this down and establish roles and set expectations.
A middle office serves as an intermediary between other business segments, and manages day-to day operations. It ensures the accuracy of data as it flows, back and forth and faster and faster in real time. It supports risk management by creating risk policies and procedures.
A strong and empowered middle office is the new normal.
The backbone and effectiveness of a risk management program rests in the middle office. It will typically use inputs from both the front office and the back office, to build a solid transaction monitoring and control program. A middle office structure should be transparent and enhance customer service while mitigating risk and reducing unnecessary costs.
Pohl Consulting and Training can help you establish or define your middle office by:
- Documenting a defined risk management program.
- Providing tools to analyze organizational effectiveness
- Developing operational risk controls
- Establishing compliance monitoring activities
- Creating reporting and escalation thresholds and protocols
- Policy and procedure review
- Setting strategic targets and benchmarks
Consistency and accuracy of reporting emphasizes the underlying power of data. Organizations should ensure the front and middle offices are working in tandem and are coordinated in understanding risk tolerance and organizational objectives.
The organizational architecture between front and middle office requires alignment and adaptability to change. Evolution in regulation and infrastructure will continue and will leverage a strong middle office.
Pohl Consulting and Training is here to collaborate in the creation or review and improvement of your middle office.