Imagine that a store has three parts: the front, the middle, and the back. The front is where customers come to buy things, the middle is where the store keeps its inventory, and the back is where the store manages its finances and paperwork.
In finance, we have something similar. The front office is like the store’s front, and it’s where the people who work with customers or clients are located. For example, investment bankers, traders, and financial advisors work in the front office. They’re the ones who help clients make financial decisions, buy and sell stocks and bonds, and manage portfolios.
The back office is like the store’s back. It’s where the people who manage the finances and paperwork of the company are located. For example, accountants, compliance officers, and operations specialists work in the back office. They’re the ones who make sure that everything is running smoothly, that transactions are processed correctly, and that the company is following all the rules and regulations.
Finally, we have the middle office, which is like the store’s middle. It’s where the people who support both the front and the back office work. For example, risk managers, data analysts, and IT professionals work in the middle office. They’re the ones who help the front office make informed decisions by providing data and analysis, and they help the back office by providing technical support and improving processes.
Click here for a detailed explanation of the Front Office.