Investment Banks: Working in Operations?

[mushrooms]

Quick question.
If you were asked, why you would want to work in middle office (operations department) specifically, what would your answer be?

[fortcher]

Something along the lines of.. (ignore my exact wording)

You feel that gaining an appreciation and ground-level understanding of the core workings of the business operations is important for anyone, regardless of their position. It's very difficult to make critical decisions, without an understanding of the core day-to-day operations etc. Staff at all levels including executives and traders should all spend time in operations to gain that grass-roots understanding. This equips you to better understand the real world impact of any potential decisions or projects that you may work on in the future etc. You really see it as the basis of building a solid working knowledge of the company's inner workings.

Also, perhaps you are simply interested in operations, as they also don't wanna hire someone who might only wanna work there for 4 weeks then quit and move on etc.

[zmcnulty]

I'm in my 3rd year in Operations. I've asked been asked, and have asked, this exact question in interviews. Ultimately, what makes Operations interesting (specifically, within investment banking) is that you can develop an understanding of the entire trade lifecycle, from issuance to final posting. Your average front office person doesn't really know anything that happens after execution and trade confirmation. And a lot of them don't care. If you don't care either, I suggest you don't bother applying. You'll hate it after six months and quit anyway.

We ask specific questions to find out if someone is actually interested in Operations, or just wants to get a "foot in the door" of investment banking and will try to jump to front office in a year. Why would we hire someone like that? If this is your plan, be prepared to hide it very well. It's extremely rare for someone to go from operations to front office.

Depending on your organization, you'll also be able to drive process change; front office is usually occupied with the sales/trading function, as they should be, leaving IT to develop and drive their change. Operations is a cost center, so we drive our own change to increase capacity, lower costs, improve service, decrease processing times, and so forth.

[rol1ndo]

I'm in my 3rd year in Operations. I've asked been asked, and have asked, this exact question in interviews. Ultimately, what makes Operations interesting (specifically, within investment banking) is that you can develop an understanding of the entire trade lifecycle, from issuance to final posting. Your average front office person doesn't really know anything that happens after execution and trade confirmation. And a lot of them don't care. If you don't care either, I suggest you don't bother applying. You'll hate it after six months and quit anyway.

We ask specific questions to find out if someone is actually interested in Operations, or just wants to get a "foot in the door" of investment banking and will try to jump to front office in a year. Why would we hire someone like that? If this is your plan, be prepared to hide it very well. It's extremely rare for someone to go from operations to front office.

Depending on your organization, you'll also be able to drive process change; front office is usually occupied with the sales/trading function, as they should be, leaving IT to develop and drive their change. Operations is a cost center, so we drive our own change to increase capacity, lower costs, improve service, decrease processing times, and so forth.

Hello zmcnulty, your advice is very clear and useful. I appreciate when people can explain how really things work. This is my first year working in operations just after graduation and I didn't have much information about what it was before to start in this job. Now, I can tell you that it can be very profitable experience, dive in the world of operations (BE) can be very instructive and gives you many responsibilities and the opportunity to take many decisions that can really affect the business: reducing time processing, improving service, lowering costs. Finally it's a good school for professional life.

[TJrandom]

Or you could say - I want to learn the process and controls that are in place so that I can figure out a way to circumvent them and perpetrate a financial fraud to my financial benefit and become famous in the process....

http://en.wikipedia.org/wiki/Accounting_scandals

[Jakebullet]

Or you could say - I want to learn the process and controls that are in place so that I can figure out a way to circumvent them and perpetrate a financial fraud to my financial benefit and become famous in the process....

http://en.wikipedia.org/wiki/Accounting_scandals

Priceless.

[DeonLee]

Good profits. Usually being traded for $5 or less than that per share over the counter (OTC) through quotation services, these penny stocks have limited liquidity and can sharply change.

[schroeder]

Don't work in ops if you can help it. Noone chooses ops as a career choice; people just end up there if they can't get anything else.

Sorry if I am wrong but my impression is that once you start in ops, it's hard to go anywhere else (not impossible, but hard). And you are competing with your colleagues because everyone else is trying to get out too.

However, I do repsect the work because it is important.

[zmcnulty]

In my case, my career choice was primarily geographic (Japan/Tokyo) rather than industrial. So I pretty much applied to all jobs that seemed somewhat applicable to my major and experience and then chose amongst the offers I received.

I would therefore mostly agree with schroeder; I was not actively seeking an Ops position per se, evidenced by the fact that I didn't apply to any other banks' Ops divisions. There is little information available about Ops work, so as a result I think it's the most easily misunderstood division of investment banking. There are little, if any, new grads who are truly interested in things like settlements and process improvement. They want to do more exciting stuff like hedge CB repacks and advise clients on mergers and price options. Therefore we get a lot of applicants who are disappointed when they find out what it's really like, applicants who have ulterior motives like one day moving to front office, or applicants who compromise on their ambitions (easily justifiable since it's not exactly a great job market these days). In an interview it's easy to give an answer to the "why" question like the one I posted earlier, but truly believing it is a different story.

However, I will say that most of the people I work with in Ops are not trying to "get out" as they intend to keep developing their careers within Operations. Compared to similar positions in other industries, it's well-paying considering the stress levels, working hours (as far as I know), and responsibilities. It is entirely possible to have a comfortable career solely in Ops eventually making 200k a year, getting various lavish benefits, and so on. However you will obviously never see huge bonuses like S&T or IBD people, never see your name in newspapers (you hope), never really know trading or hedging strategies. It depends on your values--I would argue that overall quality of life in Ops is higher than many front office jobs, especially if you are just starting in finance.

In my case I am just passing through; investment banking is not my first industry to work in, and will probably not be my last. I like knowing how industries work, and for investment banking, Ops seems to be a good vantage point. It will be extremely difficult to downgrade my salary when I move on though :/

[CC_レモン]

I believe if one is working in operations doing BAU type work closely related to certain business processes, then it's certainly hard to break out.

i.e. If one does Fixed Income processing in Back Office fund accounting systems, then it's difficult for said person to move to the Front Office trading desk for Fixed Income.

Typically the line you'll get by companies is that you can't do the job of Front Office if you're already in Back Office...

It's a load of crock IMO, because, while the person may not be an 'expert' on the trading side of fixed income, it doesn't mean they're an absolute idiot and have no clue about the industry in which they work..

The issue is, especially now a days, that it's totally a buyer's market out there, and companies can afford to hold out for some 'expert' in the field, because there are sooo many people looking for jobs..

I really dislike the 'label' that's applied to people that if they're back office, implying that they don't have the ability to learn or apply any of their knowledge working in the industry to become successful and perform adequately..

Also, I think it's somewhat humorous that companies expect to find an IT Development Person who is ALSO an EXPERT in Equity Trading. It certainly helps to know the business and have some related experience on the topic. However, to turn down a developer who may have worked in the Back Office side of things in an investment bank simply because they aren't a business expert... Geesh.. A developer's primary focus is NOT being an expert on the business side, but being an expert in development standards, and all things related to development in relation to the industry they're working in especially.

[Jakebullet]

I believe if one is working in operations doing BAU type work closely related to certain business processes, then it's certainly hard to break out.

i.e. If one does Fixed Income processing in Back Office fund accounting systems, then it's difficult for said person to move to the Front Office trading desk for Fixed Income.

Typically the line you'll get by companies is that you can't do the job of Front Office if you're already in Back Office...

It's a load of crock IMO, because, while the person may not be an 'expert' on the trading side of fixed income, it doesn't mean they're an absolute idiot and have no clue about the industry in which they work..

The issue is, especially now a days, that it's totally a buyer's market out there, and companies can afford to hold out for some 'expert' in the field, because there are sooo many people looking for jobs..

I really dislike the 'label' that's applied to people that if they're back office, implying that they don't have the ability to learn or apply any of their knowledge working in the industry to become successful and perform adequately..

Also, I think it's somewhat humorous that companies expect to find an IT Development Person who is ALSO an EXPERT in Equity Trading. It certainly helps to know the business and have some related experience on the topic. However, to turn down a developer who may have worked in the Back Office side of things in an investment bank simply because they aren't a business expert... Geesh.. A developer's primary focus is NOT being an expert on the business side, but being an expert in development standards, and all things related to development in relation to the industry they're working in especially.

It will be easier for developers to make the leap from middle to Front. Once at the front if they are exposed directly to the traders making excel pricing models or ad-hoc development then they can easily learn the business and are encouraged to do it. When they do become traders you have to do the pricing yourself until they are replace. I have heard it is tough if you are not exposed to FO users at all. In which case if you want to move on; Change companies.

When interviewing for any position in the MO though never say "I want to be in the front office in the future". when asked how you want to progress in the future. Say

"I am interested in learning more about back and front office processes. I would like in the future to be more exposed to those users and understand their business fully in order to be able to streamline the workflow and efficiency of our middle office teams."

[daijoubu???]

Quick question.
If you were asked, why you would want to work in middle office (operations department) specifically, what would your answer be?

I have a friend here his name is Tokyo Joe a long time ago he worked for a bank like this (I think) you should ask him. He has a weekly podcast and you can contact him at the podcast (I guess) Hes retired now for many years but knows a lot about banks and people who work in banks http://forum.gaijinpot.com/showthrea...74#post1074674 Hope that helps

[steeny]

I have a friend here too.
He may also have worked at a bank (I think).
He has done a lot of banking, and has been to a lot of different banks here, talking with a lot of bank tellers, so he knows a lot about banks and people who work in banks.
He will be making exciting podcasts about his banking adventures, with live podcasts of him taking numbers from the machines to wait for a teller, and also you will be able to listen to him complete various banking forms.
There will also be pay-per-listen episode where he pushes himself to the limit, using an ATM.

[Jakebullet]

I have a friend here too.
He may also have worked at a bank (I think).
He has done a lot of banking, and has been to a lot of different banks here, talking with a lot of bank tellers, so he knows a lot about banks and people who work in banks.
He will be making exciting podcasts about his banking adventures, with live podcasts of him taking numbers from the machines to wait for a teller, and also you will be able to listen to him complete various banking forms.
There will also be pay-per-listen episode where he pushes himself to the limit, using an ATM.

As far as I know the OP is talking about Investment banking. I doubt there would be many ATMs or bank tellers and forms to be filled in. - well maybe a few forms

[Melvin01]

Incoming investment traffic is vital to a company's growth. It will grant the company the strength in surpassing economic storms and the edge to cultivate its growth even more. Foreign investment is traditionally solicited, though an established company's stock will be sought after.

[flowking]

Hi, I have recently joined goldman as an operations strategist in their bangalore office (straight from engineering school). I wanted to know what would be the steps i would have to take in order to get a job in operations in japan.
For example Would there be any certifications barriers ? (hopefully not)
Is language proficiency a must ? And any other barriers like less employment opportunities ?

Basically i like technology, knowing how things work and dont really want to do an mba. Technology in finace pays really well, that's why i chose operations. but i would also like to get to travel the world therefore this question. I did turn down a job at Sony in tokyo for my current location though because sony's pay was only 4million yen. I am hoping operations in japan would pay more than that
hoping for good answers
thanks

[zmcnulty]

GS moved most of their Tokyo Ops people out of Japan in early 2010, as far as I know only a skeleton crew remains. Even people completely fluent in Japanese got sent out.

Obviously you should ask around internally, but that's the impression I got since I lost a lot of friends pretty suddenly

So if you want to stay in Ops yet work in Japan, you may need to switch companies. Good luck!

[flowking]

Thanks a lot zmcnulty, appreciate the info

[Dan_77]

Something along the lines of.. (ignore my exact wording)

You feel that gaining an appreciation and ground-level understanding of the core workings of the business operations is important for anyone, regardless of their position. It's very difficult to make critical decisions, without an understanding of the core day-to-day operations etc. Staff at all levels including executives and traders should all spend time in operations to gain that grass-roots understanding. This equips you to better understand the real world impact of any potential decisions or projects that you may work on in the future etc. You really see it as the basis of building a solid working knowledge of the company's inner workings.

Also, perhaps you are simply interested in operations, as they also don't wanna hire someone who might only wanna work there for 4 weeks then quit and move on etc.

These details have helped a great deal. I am currently looking into a career change and working around the Banking world (Canary Wharf) I've really taken a taste for Operations.
I have no banking experiences or qualifications relevant for this role but the people I know that work in investment banking know my potentials and are keep saying to be I would fit in well in this department. My only problem would be my c.v. It really dosen't sell me and being an actor and only working catering jobs, I feel that my c.v will really let me down. What are your views?

[ttokyo]

I have no banking experiences or qualifications relevant for this role but the people I know that work in investment banking know my potentials and are keep saying to be I would fit in well in this department. My only problem would be my c.v. It really dosen't sell me and being an actor and only working catering jobs, I feel that my c.v will really let me down. What are your views?

Are you a girl ? Sorry to break the news, but it is likely that these 'friends' are just -ahem- 'taking advantage of you', if you understand what I mean (nudge nudge, wink wink)
If you want to get into finance, get some related qualifications or apply for non-financial jobs in the organization such as receptionist.

[onlinesilk1]

In my case, my career choice was primarily geographic rather than industrial. So I pretty much applied to all jobs that seemed somewhat applicable to my major and experience and then chose amongst the offers I received.

[ダニエル]

In my case, my career choice was primarily geographic rather than industrial. So I pretty much applied to all jobs that seemed somewhat applicable to my major and experience and then chose amongst the offers I received.

And when you couldn't find one of those you became a spam robot that cannot even correctly identify the correct markup code for your spam links. Must have been one of those for-profit online universities.

[TravelMate 800]

Bumping the thread with a question.

I live in Osaka and will take CFA L1 in June in Tokyo. Provided I pass, I would like to work for a securities company, bank, etc. in Osaka (any type of job is fine and operations actually interests me as well) and continue on with to CFA levels 2 and then 3. Any suggestions on companies to contact or steps to take? I know of a good deal of securities companies in Kitahama but I'm not sure where to start. If it helps, I do speak Japanese (business level -- have been living in Japan 4 years and have been studying for 12 and majored in it in college).

Thanks.

[ttokyo]

Bumping the thread with a question.

I live in Osaka and will take CFA L1 in June in Tokyo. Provided I pass, I would like to work for a securities company, bank, etc. in Osaka (any type of job is fine and operations actually interests me as well) and continue on with to CFA levels 2 and then 3. Any suggestions on companies to contact or steps to take? I know of a good deal of securities companies in Kitahama but I'm not sure where to start. If it helps, I do speak Japanese (business level -- have been living in Japan 4 years and have been studying for 12 and majored in it in college).

Thanks.

Almost no Japanese company will honor the CFA, especially the lowest level. For them, the focus is on the domestic tests, e.g. the Shoken Analyst or the Shoken Gaimuin.

Your chances are much better at foreign companies, but also there, just passing the lowest level of CFA just shows your 'interest in the subject', but other background such as field of study or past work experience will be much more important if you apply for a job. Also keep in mind that most foreign companies are in Tokyo. Some banks such as Citi or HSBC who are building up a nationwide networkwork might also hire the occasional foreigner in the Osaka region, but after Merril Lynch's failed takeover of Yamaichi, no foreign security companies do nationwide retail.

[TravelMate 800]

Almost no Japanese company will honor the CFA, especially the lowest level. For them, the focus is on the domestic tests, e.g. the Shoken Analyst or the Shoken Gaimuin.

Your chances are much better at foreign companies, but also there, just passing the lowest level of CFA just shows your 'interest in the subject', but other background such as field of study or past work experience will be much more important if you apply for a job. Also keep in mind that most foreign companies are in Tokyo. Some banks such as Citi or HSBC who are building up a nationwide networkwork might also hire the occasional foreigner in the Osaka region, but after Merril Lynch's failed takeover of Yamaichi, no foreign security companies do nationwide retail.

Thanks for the info. Still can't hurt to try though right?

I'm not just interested in working for a shoken company but anything finance related is fine.

I went to the Shoken Analyst website (saa.or.jp) and they had CMA and CIIA listed. Have you ever heard of the latter? It seems to overlap quite a bit with CFA. Is it more recognized in Japan? I'm a bit hesitant to enroll in it after doing a search comparing it to CFA (which I definitely plan to continue through level 3 no matter how my career progresses) as I could not find one good thing about it ("it's outdated" "depreciating in value" etc etc.).

[ttokyo]

I went to the Shoken Analyst website (saa.or.jp) and they had CMA and CIIA listed. Have you ever heard of the latter? It seems to overlap quite a bit with CFA. Is it more recognized in Japan?

Sorry, no idea. But even though the CFA is probably the most 'known' in Japan, it is merely a 'nice to have'. When I was a trader, I had to take the 'Shoken Gaimuin' test. If you work mainly with domestic products, it's more important to know their definitions, such as '単利' (simple yield) for bonds.

[TravelMate 800]

Thank you for the reply.

How would you say the gaimiun test differs from the CMA exam?

As a non native speaker, how hard was it?

Taking one the gaimuin or the CMA seems like something I should add to my list of things to aim for however I still will do CFA first as I rather learn everything first in English and then translate over.

[ttokyo]

As a non native speaker, how hard was it?

Taking one the gaimuin or the CMA seems like something I should add to my list of things to aim for however I still will do CFA first as I rather learn everything first in English and then translate over.

If you know the topics in english, it's easy, BUT you need to know the Japanese technical terms. These are also NOT easy for native speakers. TAC has the most popular study material.

www.gaimuin.net/
ja.wikipedia.org/wiki/外務員_(金融商品)


It's much much if you already work in finance, as you will deal with these things on a daily basis.

Also keep in mind that you have not even passed CFA LVL 1 yet. Our of 4 people I know who took the test together at my company, only one passed...

[TravelMate 800]

Thanks for the info. Goal one is CFA. Perhaps in a few years I'll take on the shouken gaimuin. (I speak and read at the business level)

How would you say shouken gaimuin differs from CMA (shouken analyist)?

[ttokyo]

Thanks for the info. Goal one is CFA. Perhaps in a few years I'll take on the shouken gaimuin. (I speak and read at the business level)

How would you say shouken gaimuin differs from CMA (shouken analyist)?

No idea about CMA. The shoken analyst is rather similar to the CFA, (i.a. 'Analyst' know-how) but again more a focus on Japanese products and regulations. Especially difficult were the rules on balance sheet consolidation/accounting for M&A. Shoken Gaimuin is a SALES license, so much easier in comparison. Focus is more on product knowlege, some tax and compliance rules.

[TravelMate 800]

No idea about CMA. The shoken analyst is rather similar to the CFA, (i.a. 'Analyst' know-how) but again more a focus on Japanese products and regulations. Especially difficult were the rules on balance sheet consolidation/accounting for M&A. Shoken Gaimuin is a SALES license, so much easier in comparison. Focus is more on product knowlege, some tax and compliance rules.

OK. Thanks for explaining the differences and sorry about the late reply. I'll strongly consider taking one (or both if I'm crazy enough) in the future. BTW, how well do you speak Japanese? Do you think business level (where I am at right now) along with knowledge of technical terms would be sufficient in taking the shoken gaimuin test (and/or CMA as well)?

Thanks again.

[ttokyo]

OK. Thanks for explaining the differences and sorry about the late reply. I'll strongly consider taking one (or both if I'm crazy enough) in the future. BTW, how well do you speak Japanese? Do you think business level (where I am at right now) along with knowledge of technical terms would be sufficient in taking the shoken gaimuin test (and/or CMA as well)?

Thanks again.

Even 'native' level would not help as the technical terms are also difficult for 'native' Japanese. If you do CFA, Gaimuin should be relativ easy with a bit of preparation. I think TAC offers some study material.

[TravelMate 800]

Even 'native' level would not help as the technical terms are also difficult for 'native' Japanese. If you do CFA, Gaimuin should be relativ easy with a bit of preparation. I think TAC offers some study material.

What is TAC?

I figure CFA will give me enough knowledge that when the time comes to take any Japanese-related finance tests, it would be more of studying vocab than actually studying new material. Thanks again for the quick replies.

[ttokyo]

TAC offer Study material for all kinds of tests : http://www.tac-school.co.jp
Sold in any larger bookstore.

[mediwebmaster58]

Mediawebtechnology.com an expert group of internet marketing, web development and promotion group. Which provides quality range of services to private and corporate members from 2011. With own company at USA provides satisfied web designing and web development with its dedicate web hosting and guaranted seo services to the customers. For morequiries contact at frontdesk@mediawebtechnology.com or call at +91-9736400459