Course dates
Course overview
'Back and Middle Office Management' offers a unique blend of management philosophy and a systematic approach to processing and its application to risk control. The course has been presented successfully to delegates from a wide variety of backgrounds around the world, making it a "must attend course" for back office and middle office / risk control operatives.
Summary of course content
- Define the roles and responsibilities of back and middle offices and how they fit within an ORM/ERM environment
- Establish a complete systematic control and management programme in your back office that is suitable for all environments
- Discover how to blend the activities of the back office and middle office into an effective team to facilitate a high quality operational environment and minimise risk
- Understand basic derivative products and how they are used as trading and hedging mechanisms
- Practice risk identification, mitigation and monitoring in accordance with Basel II
- Create a pre-emptive control strategy to reduce your risks, costs and errors
- Introduce properly focussed management information systems to report and control risk
- Prepare properly for new products and initiatives through a New Products Steering Committee
Methodology
This is an intermediate level training course, that will assist you in defining the roles of back office, middle office and risk control in your organisation.
You will be taught to identify risks and to introduce simple mechanisms to monitor, analyse and control, without the need for expensive technical equipment and systems.
One important feature of the course is that it shows how to use simple solutions to solve difficult
problems. You will be introduced to the generic nature of products and will leave with the ability to understand their evolution and the purposes for which they were created. This will enhance the ability to control exposures on new products and improve profitability.
Who should attend this training course?
- Operations managers
- Middle office and risk managers
- Senior and middle management
- Financial and product control staff
- Treasury managers
- Auditors and internal control officers
- IT and EDP operatives
- Regulators
- Compliance staff
- Accountants and consultants
- Graduate and management trainees
Supporting publication
Day 1
Introduction to back office and middle office management
- Pre-emptive control, improved quality performance and productivity
Quality management
- Quality defined
- The cost of quality and its link with productivity
- The philosophy of responsibility management vs. accountability
- Effective pre-emptive quality control process
- The optimum control point
- Cause and effect analysis
- Matrix analysis and its use
- Graphics and comparative analysis
- Brainstorming / Quality circles
Case study and film of real life banking collapse
Group discussion and analysis on causes and generic issues
The middle office and dealer support
- Todays middle office, its scope and responsibilities
- Defining roles and responsibilities
- The middle office as a part of risk control
- The roles of the various risk managers
Group discussion and analysis
Organisation and reporting lines, roles and responsibilities
- Separation of function: front and back office, risk control and audit
- Best practice structure for effective control
Day 2
Procedures
- Production, use and maintenance
- Control diaries / control points
- Allocation and acceptance of responsibility
- Skills matrix
Straight through processing
- An introduction to the benefits in terms of quality, efficiency, productivity costs and the impact for middle and back offices
- The hierarchy of problem solving (optional)
Case study: "all at sea"
- Prioritising actions to ensure optimum positive effect
Derivative product overview
- Introduction to derivatives and their impact on risk
- FRA's, interest rate and currency swaps, futures and options
- Caps, collars and floors
- Exchange traded vs. OTC products
- Hedging using derivatives
Case study: "LTCM hedge fund" - lessons learnt and its real relevance to today's risk!
The back office as a revenue earner / cost saver
- Funding and cash management
- Errors, fines and losses
- Margin controls
- Cost reductions
- Net interest income
Case study: Non-earning assets control, brokerage
Day 3
Workshop: operational risk management and its impact on middle / back offices
The role of limits
Staff management
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Effective delegation and acceptance of responsibility
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Setting objectives
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Motivation and stress control
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Team building and the use of peer group pressure
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Training, job rotation and staff development
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The use of positive reporting
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Effective appraisal: the performance / rewards link
Case study: staff appraisal
Relating results to appraisal, using matrix appraisal process
New products review / New products steering committee (Evaluating a new derivatives product)
Day 4
Case study: an analysis of Allied Irish Bank (Allfirst) and its implications for back office / middle office managers
Processing controls in the money market, FX and derivatives environment
Detailed product flow through front, middle and back office
- Full check list including preemptive, front office controls, inter-active middle office functionality and operations processing, payment and reconciliation
Management information / a short summary of construction and use
- Status reports / comparative analysis
- The use of visual reports
- Structure of reports / the control pyramid
Group discussion: "the biggest fraud case in banking history" - Societe Generale Paris
- Despite millions of US$ spent on IT and risk management systems, one person went undetected for years building up positions of $50 billion and losses of $10 billion!
- Societe Generale is just another failure in a long line of banking failures/crisis in which the only real difference is the size of the actual loss.
- This session will show how the middle office/back office and other risk management departments could have prevented this fraud.
Case study: solving complex problems (The satellite link)
Using the skills developed on the course, delegates will be introduced to a complex, real life problem. They will use a systematic problem analysis process to identify cause elements and provide a structure for ultimate resolution and improved standards.
Portfolio controls
- How to establish proper controls over the following portfolios
- Trading
- Investment
- Hedge
- Arbitrage
- Managed asset portfolios
Hilton Hotel Singapore, Singapore, Singapore
This programme takes place on a non-residential basis at Hilton Hotel Singapore. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
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Kevin Merry
Kevin is a leading international trainer and consultant with over 27 years extensive experience with major “blue chip” financial institutions including JP Morgan, CIBC, Mizhuo and other leading global banks. Kevin now specialises in training and focuses on five main areas: "Operational Risk Management & Measurement", "Back Office Management", "Effective Middle Office", “Auditing” and "Understanding Financial Products".
Courses run by this instructor
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
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Course dates