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:
- What is Front Office of a Bank
- What is Middle Office of a Bank
- What is Back Office of a Bank
- Example / analogy with an Amusement Park
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.
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.
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.
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?
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!
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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
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
Everything you need to know about the Front Office, Middle Office and Back Office of a Bank: What is Front Office, What is Middle Office, What is Back Office, Examples of Front Office Middle Office and Back Office, and more.
Show notes and transcript at: https://www.easypeasyfinance.com/front-middle-back-office-of-bank-for-kids/
