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Middle office is an organizational layer of a bank that handles critical and time sensitive controls, execution and decision support functions. As the term suggests, middle office functions typically require close coordination with both the front and back office. The following are common examples of middle office functions.
Risk management including market and credit risk.ComplianceTrade monitoring and compliance.Order ManagementFront office executes trades and middle office manages the remainder of the trade lifecycle.Product ControlProduct control such as position limits.
Technology functions that are critical to the front office.Decision support such as performance reporting.TreasuryManagement of collections, disbursements, investment and funding activities.Financial ControlsFinancial controls and monitoring.NotesThe middle office differs widely from bank to bank. The same functions may exist at different levels in middle and back office. For example, compliance may be divided into middle and back office teams that perform complimentary roles.The term middle office is heavily associated with banking and investment banking but is occasionally used in other industries.|
| Type | | | Definition | An organizational layer of a bank that handles time sensitive controls, execution and decision support functions. | | Related Concepts | |
Organizational Structure
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