Investment Banking Operations: The Engine of GrowthSeptember 26, 2016
Think Investment Banker, think Gordon Gekko? Well there is no denying the glamour quotient is higher for high rollers who trade and make deals worth millions of dollars. But Gordon Gekko and his ilk would never be as successful or efficient if he didn’t have a trusty Operations team in the Back Office, managing transactions, ensuring processes are followed and well, just getting things done.
The Operations division of an investment bank or investment management firm is commonly referred to as the Back Office in I-Banking jargon. This is also the ‘engine room’ of an investment bank, working tirelessly to keep the vast quantities of information, money and products flowing correctly, to ensure millions of transactions are processed every day.
Playing a Hidden But Critical Function
Banking operations make sure banks’ processes and transactions are executed correctly, which minimizes risk and maximizes quality of service. The operations function also acts as a watchdog for the bank and oversees the regulatory requirements of the banks. Although this is a non-revenue generating function, this function is highly critical to the profitable functioning of a bank. Stream-lined banking operations can save billions of dollars to a bank. The more efficient a bank is at conducting its day-to-day business, the greater the percentage of revenues that will feed into the bottom line.
Starting Out? What to Expect
Firstly know that there is a HUGE variety of roles within the Operations team, and you will never have to do it all. Owing to the specialized knowledge one requires for these tasks, Operations roles usually focus on a particular function, for instance clearing or settling transactions, managing documentation, customer servicing, compliance, accounting and risk management. For example, you could be responsible for working on initiatives to enhance settlement processes, or ensuring that the information in an organisation’s P&L accounts is accurate or that risks are being reported accurately.
Most new entrants into an Ops role will have the opportunity to work in several different areas of Operations. This will allow you to gain an overview of the various types of work available, eg process-driven or project management roles.
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