What does the Operations division do?
The popular image of investment banking is one of slick, fast-moving dealmakers. But deals can only work if the right processes are in place to back them up. That’s where Operations comes in. A core function of Operations is to control and manage the processing of trades made by the various other divisions of the bank – chiefly Sales and Trading. And with such a huge number of trades being made every second of the day, it has a complex but incredibly important role to play in the successful functioning of the bank.
Operations is a non-revenue making division but it couldn’t be more vital. In helping to streamline the processes used by the front office (the revenue generating part of the bank) it can save the bank billions. A key aim, for example, is to allow traders to receive confirmations of trades and statements earlier and quicker than anyone else in the market. With market prices changing in a millisecond you can see why this is so important.
Operations also oversees many regulatory requirements of the bank, as well as resolving discrepancies in trades.
Much of its work also needs to take place 24 hours a day 7 days a week, in different markets and different time zones. In many instances, therefore, Operations adopts a ‘follow-the-sun’ model to ensure processes are able to work continuously around the globe.
In summary, it shouldn’t be surprising that Operations is often viewed as the engine of the bank. It works across the whole company to meet the operational challenges of processing transactions, settling trades and satisfying the needs of colleagues and clients across multiple time zones in all major currencies. In a large bank this is a huge undertaking with responsibility for millions of transactions every day.
Partnering seamlessly with other divisions involved in the trade process is vital. It’s no walk in the park. With growing trade volumes and increasing transaction complexity, the job of clearing and settling trades requires market-leading processes and dedicated, experienced teams. Don’t be fooled into thinking Operations is just the supporting act.
In Operations, we support Transaction Banking and Sales & Trading but also Asset Management and Wealth Management. Of course it depends on which bank you work at but at my bank we support all those four parts of the business.
Sales and Trading is the biggest area we support, which we class as our internal client. Everything they do post-trade (after they’ve executed a trade and put it into their system) is pretty much down to Operations. That includes all of the trade confirmations, right the way down to settling trades and passing funds between counterparties, as well as booking it to our profit and loss to the Finance team. Any errors that are made throughout that process could potentially cause a lot of financial risk to the bank, so it’s obviously a very important part of the bank and the trading process.
Katie, Operations Analyst, London
Meet the secret graduates
These recent graduates in Operations and Technology tweet regularly to give you an insight into their daily lives.
- The best way to organise myself with a large workload? Complete the small tasks first, then focus on the larger tasks #Tech
- Tue Oct 09 2012