BACK OFFICE FUNCTIONS
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary role of the back office in a bank?
The back office handles settlement, reconciliation, record-keeping, and administrative functions that support front-office transactions without direct client interaction.
What is the primary difference between front office and back office in a bank?
Front office deals with clients; back office handles settlements and administration.
Which department in a bank is responsible for the settlement of securities transactions?
The back office settlement department is responsible for ensuring timely delivery of securities and receipt of funds for all securities transactions executed by the front office.
What is the primary purpose of trade confirmation in back office operations?
To verify that both counterparties agree on trade terms and details.
What is Straight Through Processing (STP) in banking back office operations?
STP is an automated process that allows financial transactions to be processed from initiation to settlement without any manual intervention, reducing errors and processing time.
What is the 'T+2' settlement cycle in securities trading?
Trade settles two business days after the transaction date.
What is the significance of reconciliation in back office functions?
Reconciliation ensures that the bank's internal records match with external statements, counterparty confirmations, and nostro/vostro account balances, preventing financial discrepancies.
What is a mirror account in banking back office?
An internal account that mirrors transactions of a correspondent nostro account.
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