Infrastructure Jargon Buster
Back office – Infrastructure forms an integral part of back office department and operations; the areas of a bank that supports and carries out post-transaction processes and operations. The back office is not directly involved with making money.
Clearing house – Clearing houses (or ‘clearers) are authorised financial institutions which carry out clearing processes for those involved in transactions on either side of the trade. A clearing house takes responsibility for ensuring both sides fulfil their parts of the deal, which offers a safety cushion for some buyers and sellers where there is credit risk etc. (For more on risk, check out the risk management overview.)
Electronic trading platform – Investment banks have an area in which IT systems carry out trading of securities on a virtual market place: the electronic trading platform.
Infrastructure architect/technical architect – A common role title for professionals who apply their technical expertise to solves problems, devise IT strategy and manage the bank’s infrastructure projects (related to hardware and software, depending on expertise).
Information solutions – This refers to the applications, services and products on offer to businesses, institutional investors and banks that provide up-to-the-minute analysis, financial news and industry research at their fingertips. Some companies may also use this term to refer to their technical infrastructure (i.e. the hardware and software that keeps everyone in touch, data in check and processes running).
Financial Intermediary – This term refers to a financial institution that acts like a middleman between the buy-side and the sell-side on a transaction. In an infrastructure context, this refers predominantly to clearing houses and clearing departments of investment banks.
Post-trade services – The services that support the various necessary procedures after a transaction is complete, such as the buy-side and sell-side firms’ exchange of details and transfer of ownership documents and cash. The aim is to ensure each party fulfils their obligations in the contract for a transaction on time and correctly.