Establishing New Middle Office Functions Across all Primary Asset Classes
In a business with little to no stakeholder understanding of Middle Office functions, New Link helped define those roles and improved communication.
Problem Statement:
A Tier 1 Investment Bank’s Global Markets were interested in establishing new Middle Office functions across all primary asset classes in-line with their continuing plans to enhance front to back controls and meeting regulatory requirements.
New Link Consulting assisted by providing an experienced team to conduct an initial review of the current state of the project for the Equities business. Alongside this review they had to make recommendations for a new global functional operating model and implement it across all asset classes.
After performing a detailed analysis and conducting workshops of current functions that belong in a Middle Office based on defined principals, New Link were asked to undertake a second phase of the project. This phase was to perform the same review they had on equities, with the currencies and commodities and fixed income businesses globally (covered New York, Hong Kong, London and Paris).
A third phase included implementing agreed recommendations across all asset classes and geographies, alongside a fourth phase which involved analysing potential Middle Office activities in the Risk and Finance functions and future state recommendations space.
NLC Engagement:
New Link documented and agreed on a project governance structure, developing a detailed plan and key deliverables. This plan extended to engaging with stakeholders of the equties, currencies and fixed income teams to understand all unique aspects of the Bank.
To maintain consistency, after reviewing 1,000 functions and controls, standardised templates were deployed across all asset classes. To discuss these recommendations, multi-day workshops were hosted, which also included discussions of the differences between the asset classes, resulting in challenging stakeholders to drive consistency across the classes.
New Link provided a Functional Operating Model which highlighted the analysis of the curreny state and NeW Link’s recommendations on what Middle Office is. Provided alongside this model included a implementation plan which identified the impact on people, processes, controls and technology infrastructure.
Other approaches New Link took were installing recommendations across Front Office and Operations, and analysing Risk and Finance functions to understand the current state processes in relation to Middle Office tasks.
Outcome:
New Link’s investigation discovered there was no universal understanding across the stakeholders on the roles and responsibilities of Middle Office. New Link addressed this deficiency by working with the stakeholders to define Middle Office functions based on high-level principals. To maintain a full understanding of Middle Office, New Link ensured there was adequate access to SMEs within the Bank.
With New Link’s practitioner-led expertise, commitment needed from the Bank was reduced as there was a understanding of the roles and functions of the various teams. Relying on their expertise, the New Link team was able to ask the right questions and challenge the stakeholders effectively.
