Middle Office

“The customer is always right” is a motto in just about every industry. With today’s customers having higher exceptions than ever before, this means offering tailored solutions, meeting individual needs, and providing more personalized services. This also applies to the stock industry and particularly the middle office, which is handling an increasing number of client needs.

In the past, this office was providing very little to external clients. Now, it is expected to provide an in-depth analysis of a growing number of people both externally and internally. Take a closer look at the constantly increasing weight this office carries and what that means for your firm.

The front office

It’s the front office that usually receives reports from the office in the middle, which works to give that front office attribution, risk, and independent performance analysis to demonstrate what happened, why it happened, and what the risk or the cost of the investment strategy was.

The front office of today still needs this, but the scope required has become broader, with the daily analysis done on all portfolios and asset classes. There’s, even more, to consider if the front office is giving up its tailored applications that create operational and data silos. In that scenario, the office in the middle needs to increase its analysis distribution service levels as well.

Marketing and sales

Sales and marketing teams have to be able to properly layout the investment strategy for clients. Being able to tell the portfolio’s story in a visual and clear way is necessary here, especially at times where risk and/or performance simply aren’t what they should be. Producing content in a short time frame is an essential service to marketing and sales teams, and for many firms, these functions are managed largely using performance charts and measurement analysis from the office in the middle. If the quality here is poor, it reflects badly on the asset manager. Using professional and slick content directly from your risk and performance platforms saves time and shows clients you are working on the cutting edge of technology.

The compliance arena

From a performance, risk, and compliance view, a sharp compliance or risk officer needs access to timely, transparent, and accurate data for your mid-office. Compliance and risk teams have to be accurate at all times so they can keep the firm within regulatory limits and properly monitor and access changes daily.

They also need the tools for providing an audit trail when necessary, and this means they must have access to pricing, transaction and position data on all portfolios managed as well as adjustments from significant events like corporate actions. This information must be accurate all the time and available as soon as it is needed or relevant.

Considering all the people and functions that rely on your middle office demonstrates how essential its role is in your firm. Now is the time to evaluate the tech used in this office to see where improvements can be made and deficiencies can be eliminated.