The back office of any bank, brokerage or financial services company refers to the sections that administer the company's transactions, accounts and employees. Back-office employees are typically unseen by most customers and account-holders of the company, who usually deal with front-office personnel like investment advisors or stock brokers.
Back-office workers in the finance and securities industry generally ensure that their firm's more prosaic tasks like transaction handling, settlement, clearance, and record maintenance proceed smoothly and according to industry regulations. By contrast front-office personnel typically deal with customers while middle-office employees manage risk and IT resources.
Oiling the machine
Back office administration divisions ensure that all trades the firm or bank conducts are accounted for and that incoming funds are balanced with outgoing. They also ensure that securities are registered and delivered to account-holders. Credit and compliance divisions ensure that margin-accounts holders are kept informed of margin requirements and that dividends and other payments are properly credited. They also ensure that the firm's departments are meeting their minimum capital requirements. Financial divisions handle in-house accounting and personnel matter like payroll and financial reports.