Financial services or firms specializing in investment businesses like private equity have three vital pillars to their office operations- their front office, middle office, and back office. The front office is primarily responsible for customer management and support upfront, like having face-to-face interactions with clients and other associated client-facing responsibilities and roles. The middle office is in charge of strategic management, credit, and risk management. However, when it comes to back-office operations, most people prefer not to be in it.
Scott Tominaga – Back- office operations in the post-pandemic era
Scott Tominaga is the COO of PartnersAdmin LLC, and he has more than 17 years of valuable experience in the financial services and hedge fund industry. His company offers dynamic back-office solutions to the alternative fund industry today.
Surviving post COVID-19
He says that when it comes to the post-pandemic era, many changes have suddenly been welcomed. The key trend today is to pay attention to the investment of cybersecurity for protecting office data. By 2021, several banks and financial establishments are channeling their operational resources towards infrastructure security, especially with cyber-attacks that have taken place rampantly, especially in 2020.
The financial services sector is the first industry that is affected directly by disruptions in technology and innovations, especially in the digital age when the protection of investments and cybersecurity are prime concerns.
He says that in the age of digital transformation, it has been seen that corporate banking is investing more in more client-oriented relationships. As a result, they have shuffled their middle and back-office management roles and responsibilities for attaining the above goals. In addition, digital solutions are being boosted to cater to their customers.
Some banks are also making rapid developments in blockchain technology and cryptocurrency. In addition, there are strategies for loan expansions targeting the middle market, which is expected to lead to improvements in revenue in the future.
Changes in accounting, compliance, and administrative functions and their significance today
To cater to the needs of the digital era, there are major changes that are being made to the back-office functions of firms for financial services. It carries out tasks like maintaining records, settlement, accounting, IT services, clearance, and regulatory compliance. The operations executed by the front office staff depend extensively on the back-office activities of the firm. The employees here focus on designing the computer systems and managing the finances of the firm.
In addition, they maintain the database systems and hire new talent. Scott Tominaga sums up by saying that the jobs in the back office are as vital as the jobs that are designated for the front and middle office staff, even more in the post-pandemic era. The department is focused on supporting both the front and middle offices smoothly. It emphasizes the company’s internal efforts, which is why it is indispensable and makes it so distinct from those working in the middle or front office in the current era today.