The role of a settlements/operations department is to efficiently settle all trades initiated by the front office departments.
An efficient operations department can save an institution that it serves a lot of time and money by recognising other incidents or indications that may lead to one of these more costly events. Dealers, once they have completed a trade, have little (if any) interest or knowledge of what happens next.
In the past, cocky traders would complain that they made all the money, and then back office lost it. This has now changed radically. The likelihood of back office personnel now being primarily responsible for major errors is small; however, failures at the human level in recognising fairly obvious “suspicious” circumstances surrounding a trade continue to be numerous.
Examples would include: blatant attempt by front office to trade beyond their authorised limits; seize of open positions; exceptional turnover compared to the room; excess of counterparty limits.
Back office could be seen as culpable if they did not notice these and they then failed to report them.
At the end of the course delegates will understand:
- A complete Systematic Control and Management Program suitable for all environments
- Build the correct structure for effective Front, Middle and Back Office Operations optimizing the use of STP and achieving settlement efficiency
- Create a pre-emptive control strategy and reduce your risks, costs and errors
- Develop a generic, evolutionary approach for the processing of all products
- Improve the efficiency of your control, processing, settlement and reporting activities
- Learn how to use a responsible management philosophy and practice which will create the environment for unequalled success
- Gain the knowledge to make your back office a key revenue earner by enhancing cash management and controlling non-earning assets
- Develop those essential management skills which will enable you to motivate your staff to superior performance
- Quality Performance and Productivity
- Case study/Group Work: Analysing and discussion of major banking collapse and its relevance to back office.
- Organisation and Reporting Line
- Separation of function: front and back office, risk control and audit in line with industry standard and best practice
- Analyzing & solving problems
- The hierarchy of problem solving
- Empowering the people
- Controlling the people
- Case Study/ Group Work: Prioritizing actions to ensure optimum positive effect
- Procedures
- Production, use and maintenance
- Control diaries / control points
- Allocation and Acceptance of responsibility
- Management by Objectives
- Use of project briefs
- Monitoring & reporting
- The role of the middle office
- The Middle Office as a part of overall risk control
- Structure
- Reporting Lines / Responsibilities
- How to control your Middle Office
- The central control file
- Expense Control and the Role of the Middle Office
- Case study/ Group Work: Group discussion re “The Biggest Fraud Case in Banking History” Societe Generale Paris.
- The back office as revenue earner
- Funding & cash management
- Errors, fines & losses
- Margin controls/Cost reductions
- Processing
- Generic processing approach
- Process management
- Systematic process control
- Control of derivative products
- Staff Management
- Effective delegation
- Setting objectives
- Acceptance of responsibility
- Motivation & stress control
- Team building / the use of peer group pressure
- Training, job rotation & staff development
- The use of positive reporting
- Controlling stress
- Effective appraisal: the performance / rewards link
- Case study/ Group Work: Staff Appraisal – setting objectives, monitoring performance and rewarding results fairly between staff
- The BIS/BASEL Accord as it relates to Operational Risk
- Analysis / Impact to all Back Office areas
- Key points in new Basel II Capital Accord
- Discussion on the implications for Risk and Control
- Review of the major types of operational risks
- New products review
- Evaluating & controlling risk
- Case Study/ Group Work: Identifying the risks inherent in a proposed new product and engineering it’s processing into existing work practices and procedures
- The use of Limits as a Control Mechanism
- Guidance vs. Mandatory
- Position controls, Volume, Credit
- Delivery / settlement limits
- Management Information
- Status reports
- Comparative analysis
- The use of visual reports
- Structure of reports / the control pyramid
- Case study: Allied Irish Bank – how a lack of proper controls, knowledge and infrastructure can have such devastating consequences – how could this have been identified and easily prevented?
- Course Overview
-
The role of a settlements/operations department is to efficiently settle all trades initiated by the front office departments.
An efficient operations department can save an institution that it serves a lot of time and money by recognising other incidents or indications that may lead to one of these more costly events. Dealers, once they have completed a trade, have little (if any) interest or knowledge of what happens next.
In the past, cocky traders would complain that they made all the money, and then back office lost it. This has now changed radically. The likelihood of back office personnel now being primarily responsible for major errors is small; however, failures at the human level in recognising fairly obvious “suspicious” circumstances surrounding a trade continue to be numerous.
Examples would include: blatant attempt by front office to trade beyond their authorised limits; seize of open positions; exceptional turnover compared to the room; excess of counterparty limits.
Back office could be seen as culpable if they did not notice these and they then failed to report them.
- Course Objective
-
At the end of the course delegates will understand:
- A complete Systematic Control and Management Program suitable for all environments
- Build the correct structure for effective Front, Middle and Back Office Operations optimizing the use of STP and achieving settlement efficiency
- Create a pre-emptive control strategy and reduce your risks, costs and errors
- Develop a generic, evolutionary approach for the processing of all products
- Improve the efficiency of your control, processing, settlement and reporting activities
- Learn how to use a responsible management philosophy and practice which will create the environment for unequalled success
- Gain the knowledge to make your back office a key revenue earner by enhancing cash management and controlling non-earning assets
- Develop those essential management skills which will enable you to motivate your staff to superior performance
- Course Outline
-
- Quality Performance and Productivity
- Case study/Group Work: Analysing and discussion of major banking collapse and its relevance to back office.
- Organisation and Reporting Line
- Separation of function: front and back office, risk control and audit in line with industry standard and best practice
- Analyzing & solving problems
- The hierarchy of problem solving
- Empowering the people
- Controlling the people
- Case Study/ Group Work: Prioritizing actions to ensure optimum positive effect
- Procedures
- Production, use and maintenance
- Control diaries / control points
- Allocation and Acceptance of responsibility
- Management by Objectives
- Use of project briefs
- Monitoring & reporting
- The role of the middle office
- The Middle Office as a part of overall risk control
- Structure
- Reporting Lines / Responsibilities
- How to control your Middle Office
- The central control file
- Expense Control and the Role of the Middle Office
- Case study/ Group Work: Group discussion re “The Biggest Fraud Case in Banking History” Societe Generale Paris.
- The back office as revenue earner
- Funding & cash management
- Errors, fines & losses
- Margin controls/Cost reductions
- Processing
- Generic processing approach
- Process management
- Systematic process control
- Control of derivative products
- Staff Management
- Effective delegation
- Setting objectives
- Acceptance of responsibility
- Motivation & stress control
- Team building / the use of peer group pressure
- Training, job rotation & staff development
- The use of positive reporting
- Controlling stress
- Effective appraisal: the performance / rewards link
- Case study/ Group Work: Staff Appraisal – setting objectives, monitoring performance and rewarding results fairly between staff
- The BIS/BASEL Accord as it relates to Operational Risk
- Analysis / Impact to all Back Office areas
- Key points in new Basel II Capital Accord
- Discussion on the implications for Risk and Control
- Review of the major types of operational risks
- New products review
- Evaluating & controlling risk
- Case Study/ Group Work: Identifying the risks inherent in a proposed new product and engineering it’s processing into existing work practices and procedures
- The use of Limits as a Control Mechanism
- Guidance vs. Mandatory
- Position controls, Volume, Credit
- Delivery / settlement limits
- Management Information
- Status reports
- Comparative analysis
- The use of visual reports
- Structure of reports / the control pyramid
- Case study: Allied Irish Bank – how a lack of proper controls, knowledge and infrastructure can have such devastating consequences – how could this have been identified and easily prevented?