Middle office analyst

A Middle Office Analyst is a financial professional who plays a crucial role in supporting the functions between front-office (trading and sales) and back-office (settlement and accounting) operations. Middle Office Analysts are responsible for various tasks related to risk management, trade support, and ensuring the accuracy and efficiency of financial transactions.

Middle office analysts typically perform the following tasks:

• Assist in the execution and confirmation of trades initiated by the front office.
• Monitor and assess various types of risks, including market risk, credit risk, and operational risk.
• Verify the accuracy of trade details, ensuring compliance with regulatory requirements.
• Manage collateral requirements and ensure appropriate levels are maintained.
• Reconcile trade and position records to identify and resolve discrepancies.
• Oversee the entire life cycle of financial transactions from initiation to settlement.
• Prepare and present reports on trade activity, risk exposure, and other relevant metrics.
• Ensure compliance with industry regulations and internal policies.
• Work closely with front-office and back-office teams to facilitate smooth operations.
• Identify opportunities for process enhancements and contribute to efficiency initiatives.

The following job titles also refer to middle office analyst:

senior analyst – control
derivatives middle office analyst
middle office risk and control analyst
middle office regulatory reform analyst
middle office specialist
structured products middle office analyst
middle office associate
transaction reporting specialist
middle office junior manager
middle office senior manager

Middle Office Analysts typically work in financial institutions such as investment banks, asset management firms, or hedge funds. The role involves a combination of office work, collaboration with various teams, and adherence to tight deadlines, especially during peak trading periods.

A bachelor’s degree in finance, business, or a related field is commonly required for Middle Office Analyst positions. Relevant certifications, such as Chartered Financial Analyst (CFA) or Financial Risk Manager (FRM), can enhance qualifications. Strong analytical and problem-solving skills are crucial, and proficiency in financial modeling and data analysis tools is advantageous. Practical experience gained through internships or entry-level positions in middle office functions contributes to the development of Middle Office Analysts. Continuous learning, staying updated on industry trends, and obtaining relevant certifications contribute to the ongoing success of professionals in middle office roles.

ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:

• the nature of the work performed in an occupation in relation to the characteristic tasks and duties
• the level of formal education required for competent performance of the tasks and duties involved and
• the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.

Middle office analyst is a Skill level 4 occupation.

These occupations, although different, require a lot of knowledge and skills similar to middle office analyst.

investment fund management assistant
bank treasurer
actuarial consultant
securities analyst
banking products manager

This knowledge should be acquired through learning to fulfill the role of middle office analyst.

• Banking activities: The broad and continuously growing banking activities and financial products managed by banks ranging from personal banking, corporate banking, investment banking, and private banking, up to insurance, foreign exchange trading, commodity trading, trading in equities, futures and options trading.
• Financial management: The field of finance that concerns the practical process analysis and tools for designating financial resources. It encompasses the structure of businesses, the investment sources, and the value increase of corporations due to managerial decision-making.
• Office administration: The paperwork processes related to the administrative areas of an office environment. The activities or processes may include financial planning, record keeping and billing and managing the general logistics of an organisation.
• Business processes: Processes that an organisation applies to improve efficiency, set new objectives and reach goals in a profitable and timely manner.
• Office software: The characteristics and functioning of software programs for office tasks such as word processing, spreadsheets, presentations, emails, and databases.

These skills are necessary for the role of middle office analyst.

• Apply company policies: Apply the principles and rules that govern the activities and processes of an organisation.
• Ensure compliance with legal requirements: Guarantee compliance with established and applicable standards and legal requirements such as specifications, policies, standards, or law for the goal that organisations aspire to achieve in their efforts.
• Handle paperwork: Handle work-related paperwork, ensuring all relevant requirements are met.
• Comply with legal regulations: Ensure you are properly informed of the legal regulations that govern a specific activity and adhere to its rules, policies and laws.
• Maintain records of financial transactions: Collate all the financial transactions done in the daily operations of a business and record them in their respective accounts.
• Provide support in financial calculation: Provide colleagues, clients or other parties with financial support for complex files or calculations.
• Use office systems: Make appropriate and timely use of office systems used in business facilities depending on the aim, whether for the collection of messages, client information storage, or agenda scheduling. It includes the administration of systems such as customer relationship management, vendor management, storage, and voicemail systems.
• Execute administration: Carry out administrative work and establish public relations.
• Provide financial product information: Give the customer or client information about financial products, the financial market, insurance, loans, or other types of financial data.
• Analyse financial risk: Identify and analyse risks that could impact an organisation or individual financially, such as credit and market risks, and propose solutions to cover those risks.
• Handle financial transactions: Administer currencies, financial exchange activities, deposits as well as company and voucher payments. Prepare and manage guest accounts and take payments by cash, credit card and debit card.
• Conduct qualitative research: Gather relevant information by applying systematic methods, such as interviews, focus groups, text analysis, observations and case studies.

This knowledge is sometimes, but not always, required for the role of middle office analyst. However, mastering this knowledge allows you to have more opportunities for career development.

• Financial products: The different types of instruments that apply to the cash flow management that are available on the market, such as shares, bonds, options or funds.
• Risk management: The process of identifying, assessing, and prioritising of all types of risks and where they could come from, such as natural causes, legal changes, or uncertainty in any given context, and the methods on dealing with risks effectively.
• Securities: The financial instruments traded in financial markets representing both the right of property over the owner and at the same time, the obligation of payment over the issuer. The aim of securities which is to raise capital and hedge risk in financial markets.
• Statistics: The study of statistical theory, methods and practices such as collection, organisation, analysis, interpretation and presentation of data. It deals with all aspects of data, including the planning of data collection in terms of the design of surveys and experiments in order to forecast and plan work-related activities.
• Customer relationship management: The customer-oriented management approach and basic principles of successful customer relations that focus on interactions with customers such as technical support, customer services, after-sales support and direct communication with the customer.

These skills and competences are sometimes, but not always, required for the role of middle office analyst. However, mastering these skills and competences allows you to have more opportunities for career development.

• Trace financial transactions: Observe, track and analyse financial transactions made in companies or in banks. Determine the validity of the transaction and check for suspicious or high-risk transactions in order to avoid mismanagement.
• Enforce financial policies: Read, understand, and enforce the abidance of the financial policies of the company in regard to all the fiscal and accounting proceedings of the organisation.
• Communicate with banking professionals: Communicate with professionals in the field of banking in order to obtain information on a specific financial case or project for personal or business purposes or on behalf of a client.
• Obtain financial information: Gather information on securities, market conditions, governmental regulations and the financial situation, goals and needs of clients or companies.
• Manage administrative systems: Ensure administrative systems, processes and databases are efficient and well managed and give the sound basis to work together with the administrative officer/staff/professional.
• Advise on financial matters: Consult, advise, and propose solutions with regards to financial management such as acquiring new assets, incurring in investments, and tax efficiency methods.
• Manage financial risk: Predict and manage financial risks, and identify procedures to avoid or minimise their impact.
• Manage contracts: Negotiate the terms, conditions, costs and other specifications of a contract while making sure they comply with legal requirements and are legally enforceable. Oversee the execution of the contract, agree on and document any changes.
• Operate financial instruments: Work with financial instruments such as stocks, bonds, mutual funds and derivatives.
• Maintain contract administration: Keep contracts up-to-date and organise them according to a classification system for future consultation.
• Provide improvement strategies: Identify root causes of problems and submit proposals for effective and long-term solutions.

2413 – Financial analysts

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References

1. Middle office analyst – ESCO
2. What does a Middle Office Analyst do? Role & Responsibilities | Glassdoor
3. Middle Office Definition and Function in Financial Services Firms – Investopedia
4. Featured image: By https://news.bitcoin.com/while-the-value-locked-in-defi-soars-dozens-of-dapps-leverage-cross-chain-support/ – https://news.bitcoin.com/while-the-value-locked-in-defi-soars-dozens-of-dapps-leverage-cross-chain-support/, CC BY-SA 4.0