Definition of back-office
:of or relating to the inner workings of a business or institution :internal
- back-office operations
What's Trending Now
More Trending Words
Indulge Your Inner Word Nerd
First Known Use of back-office
1915
Financial Definition of BACK-OFFICE
back-office
What It Is
In the finance world, a back office processes the day-to-day paperwork and record-keeping associated with trades, confirmations, settlements and other financial transactions.
How It Works
For example, let’s assume you visit your broker in her office at 123 Main Street in Anytown, USA. You chat for a while, then give her instructions to execute three trades in your portfolio.
Your broker executes the trades, and although she does handle some paperwork regarding the trades, the broker’s back office creates and processes most of that paperwork, including the confirmation statements, account records, clearinghouse matters, and proofs of settlement. The back office might also do the accounting for the broker’s team, deal with legal matters as they arise, and communicate with regulators on compliance issues. This back office does not necessarily share the same location with your broker; a back office can be virtually anywhere.
Why It Matters
It’s easy to say that the back office is simply “administrative support” for “the people that matter,” but the truth is back offices are massive, crucial, often-unseen and usually unappreciated segments of the financial services industry. In many ways, they are the sausage factory that does the day-to-day work of the industry; without back offices, the financial industry would not work. Back offices are also responsible for managing the regulatory compliance related to trade execution and account records.
Source: Investing Answers
Learn More about back-office
-
Nglish: Translation of back-office for Spanish speakers Britannica English: Translation of back-office for Arabic speakers
Seen and Heard
What made you want to look up back-office? Please tell us where you read or heard it (including the quote, if possible).
