The functionalities of a middle office get blurred because people fail to understand the difference between the work that a middle office does and how it is different from the back office. It is time to get rid of such ambiguities and get clarity about the work processes involved in the middle office. It is important to remember that the back office forms the main backbone of the organization executing the work successfully. The process-oriented work will help you get clarity about the work involved and how processes get executed by professionals in the middle office.
Middle office work can be compartmentalized into four different categories and these are:
- Verification and Confirmation of Deals – Professionals in the middle office is involved in keeping a track of all the deals and their latest updates. They are required to log in the status of all the deals those are running simultaneously. After the verification work wraps up, the confirmation paperwork needs to be finalized as well. When the work is in full flow keeping a track of the changes that take place and to lock the deals well forms an important part of the work.
- Risk Analysis and Valuation – Valuating the existing options available to get a particular work done is also something that professionals belonging to the middle office should do. Assessing the volatile situation and undertaking the correlation calculation is something that the middle office needs to do. Before finalizing the work completely it is important to manage all the limits present and analyze the best results. Risk analysis is an important wing present in an office and analyzing the risks should be one of the first steps. It helps professionals have better clarity about the approach they should adopt to get the work done effectively.
- Credit Risk and Analysis – This is an integral work process involving robust counterparty risk management features that include work maintenance and documentation process. Proper and well-planned advanced credit risk measurement needs to be taken and the strategies need to be framed accordingly. When it comes to offering middle office solutions, analyzing the situation should be the first way of approaching the problem. This is usually followed by chalking out the different solutions and assessing the credit risks involved. This makes the workflow systematic.
- Reporting – Professionals belonging to the middle office make sure to offer formula based and customized financial models that are tailor-made to suit the business needs. The solutions are framed and drafted to make sure that the problem areas are addressed. Reporting is considered to be the most effective medium to inform other professionals about the flow of work and the consecutive progress. The reporting includes assessing the risk models and the necessary calculations that should be taken.
Middle office solutions are considered to be the most effective functionalities that play a huge role in improving workplace productivity. It is, therefore, important to have a clear understanding of the job profile of middle office professionals.