To have a well-functioning business, no matter whether it is a bank, investment firm or insurance company, one needs to have a back office that adequately supports the front office. Whenever customers visualize a business, they usually think of its store front, brand logo, services or products. But a business is way more than that. Back office essentially refers to the operational areas of the company that supports the front office or the customer-facing part of the business. The back-office functions are important to each company, including the ones Scott Tominaga has worked in his 25 years of experience in the financial services and alternative investment industry. He has an extensive understanding of the middle and back office, alongside other administrative functions within financial services firms.
The back office is considered to be the foundation for the operational and financial success of any company. The traditional back office can be broken down into two broad categories of function. The first one is the administrative function, which helps in keeping the company running. The second one is the support functions that directly fulfil the product and service requests of customers. Broadly speaking, administrative functions of the back office would include Human resources (HR), Information technology (IT) / data management, legal, risk management, as well as finance and accounting. On the other hand, customer service functions would include transaction processing, document preparation, account maintenance, client services, dispute resolution, and customer on-boarding. There are a number of industry specific tasks that come under the back-office operations of a financial services company, including claims processing, underwriting, credit card processing, and even loans and mortgage operations.
Efficient management of back-office operations plays a crucial role in enabling organizations to put superior focus on their core competencies, as well as in servicing their customers. In the competitive market of today, good customer experience is a major competitive differentiator. Moreover, opting to retain customers is way less costly than acquiring new ones. Hence, it is prudent to streamline the back-office functions of a company in the most efficient manner.
With the changing business landscape, many financial services firms are choosing to outsource their middle and back-office operations and accounting processes. This allows them to be less dependent on the in-house staff and their technical expertise. Third party back-office solution providers are often able to deliver improved speed and agility to financial service companies in terms of adopting new products, entering new markets and complying with changing regulatory requirements.
More information on back-office functions and trends linked with the financial services industry can be found out through industry professionals like Scott Tominaga. He began his career as a FINRA regulator and was employed for nearly 20 years in brokerage and investment management. During his tenure in the industry, he has been responsible for all aspects of back-office operations, including investor relations and marketing.
