Banks and fund managers: Mind your backs!

Banks and traditional fund managers should be beginning to worry about the state of their back offices. The massive build-up of a backlog of CDS settlements after unexpectedly rapid market growth, and the resultant systemic risk, has highlighted the importance of investing in back-office operations – an area all too frequently deemed second in rank to the front-office moneymakers. Although front-office staff are incentivized, those in back-office administration, compliance and accounting in large banks and asset managers are often paid relatively low salaries and suffer from lack of training and poor career prospects.