Front Office, Middle Office, Back Office of a Bank: Simple Explanation for Kids & Teens

What is Front Office, Middle Office and Back Office? Easy Peasy Finance for Kids and Beginners

Introduction to Front Office, Middle Office and Back Office for Kids and Teens

This video explains the concept of front office, middle office and back office in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about them, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.

Suitable for students from grade levels:

  • Elementary School
  • Middle School
  • High School

The topics covered are:

When I was reading about banks, I came across the terms front office, middle office, and back office.

What do Front Office, Middle Office, and Back Office of a bank mean?

Most divisions within a bank (or an investment bank) can be classified into three areas based on the task they perform.

These areas are known as front office, middle office, and back office.

Front Office of a Bank - Financial Literacy for Kids
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What is a front office?

The divisions within a bank that interact with customers directly are called the front office.

Some examples are sales and marketing, relationship management, advisory services, and securities trading.

The front office is responsible for generating revenue for the bank.

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What is a back office?

The divisions of the bank that provide administration and support services are called the back office. These roles are typically not client-facing.

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Some examples are clearing and settlement, record maintenance, accounting, and information technology.

The term back office is sometimes also used to describe all functions that do not generate any revenue for the bank.

And what is a middle office?

Back Office and Middle Office of a Bank - Explained in a Simple Way for Kids
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The divisions responsible for risk management, compliance with regulations, and strategy make up the middle office of a bank.

The middle office ensures that the deals negotiated by the front office comply with all relevant laws and are as per the bank’s agreements with its counterparties.

Together, the middle and back offices support the activities of the client-facing front office.

That was a lot of information!


Can you sum it up so that it is easier to remember?

If you think of it in terms of an amusement park:

  • The front office would be the ticket sellers and ride operators
  • The middle office would make sure that all the rides are safe and no laws are being broken. And finally,
  • The back office would keep track of season pass holders, billing, and maintenance of the rides

Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids and Teens

Podcast: Front, Back and Middle Office of a Bank

Front Office Middle Office and Back Office of a Bank
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