Middle Office
Categories: Company Management
When we hear the term “middle office,” we immediately think of Middle Earth, which makes us want to run off and have an LOTR marathon with our besties.
Unfortunately, though, a middle office has less to do with Ents and dragons and more to do with risk management and accounting. A middle office is philosophically situated between the front office and the back office, and to illustrate what we’re talking about, let’s astrally project ourselves to the floor of the New York Stock Exchange.
Here we are, right in the thick of it, surrounded by the hustle and bustle of kajillions of brokers. They’re on their phones, they’re shouting things, they’re buying and selling and making it happen. This is the front office, where deals are dealt and sales are sold. If we were to now teleport ourselves to the back office, we’d see another hive of activity, but instead of deals and negotiations, these folks are all about supporting the front office. This is where the exchange’s administrative tasks take place: verifying information, compiling reports, preparing paperwork, things like that.
The middle office is sort of the bridge between the two. Here we’ll probably find the exchange’s legal team, and maybe their IT folks. We’ll overhear risk management discussions, conversations about P&L statements, and debates about upgrading certain technologies. They aren’t brokers, but that doesn’t mean they don’t play a huge role in the functioning of the exchange. They make sure everything is happening according to procedure and according to the law, and they’re always looking for ways to make the exchange—or whatever type of organization in which we find a middle office—perform even better.
