What of back rooms?

One important thing that we have learned over the recent past, through our observations of societal upheaval and current events, is that words matter.  Reflecting on the often-misleading references that are used in our lives, and industry, is an opportunity to open our minds, deepen our sensitivities, and expand our learning opportunities to what exists in our current collective reality.

I've often heard the term, back office, used by some ABL and/or other leaders within bank organizations.  Users of this term surely do not intend to be offensive, however, it is an outdated reference that has no place in the more complex secured lending operations of today. 

I do recall, when working on the review and consolidation of a Detroit-based bank's ABL portfolio during the early 90s, that there did actually exist a physical cut-out in the wall of a large office space, behind which a pair of hands would accept that documentation which was passed to them through the opening by a lender's hands.  I thought, at the time, that this must've been the origin of the word back office and when I hear the term today, I remember the anonymous pair of hands that were presumably attached to a real person who worked behind the wall.

No matter the origin of this outdated reference, wall partitions, anonymous staff hands, and pass-throughs are a thing of the past.  Corporate banks or other financial entities should reflect on their team of operation professionals and consider the important reciprocal dependency that exists between lines of business and their supporting operations.  Successful partnerships between business lines and operations teams can lead to achievement of competitive advantage and consistent contributions to the bottom line through reduced expenses over the evolution, and life, of the secured finance business. 

New beginnings in secured finance operations

I was fortunate to have been hired as a Credit Process Administrator for an ABL group in 1983 by an influential ABL industry leader who became my coach and mentor for 15 or so years.  Upon joining his team, I had asked for a copy of the job description that I was to follow as I eagerly commenced with my new tasks.  My new manager responded by handing me a white pad of paper and a pen and spoke two words, "build it".  And, while some may view this interaction as somewhat frustrating, my interest was piqued, and I viewed this as both a challenge and opportunity to create my own professional destiny. 

This open road approach to creating one's own job description provided an opportunity to explore, acquire and develop skills in areas that included, but were not limited to, collateral analysis, field exam review, credit documentation, credit policy, internal audit, specialized systems and software, project management, strategic planning, cost benefit analysis, data management, trend/risk reporting, human resource management, coaching and mentoring, international operations, business continuity and operational planning. 

Most operations professionals do not start their careers as operation's managers, however.  Most new entrants, particularly in the secured finance operations environment, enter as graduates from university business programs in finance, accounting, economics or business.  Many new entrants aspire to distant roles in business lines such as credit analysts, investment analysts or lenders.  What new entrants often overlook are the significant career benefits that can be derived from longer term experience in secured finance operations.  This is, in part, because college students are not exposed to information on career opportunities in secured finance operations, as such, reference points for career pathing within operations rarely exist. 

While many colleges and universities offer supply chain (operations) management programs, these programs tend to be focused, and applicable to, materials acquisition and product delivery along the full range of process touchpoints.  Operations management, in the context of a secured finance operation (in a corporate banking context) requires a unique blend of collateral and industry knowledge and the combination of supply chain and service operations skills and expertise as both product and service delivery are key features of the corporate banking industry.  While my own MBA was in operations management, my minor was in statistical process control, and it was surprising to me just how much I used those minor skills in the work that I have done, and do today, relative to process flow, project management, and product/service delivery of the analysis product and client service.

Some operations professionals may have been encouraged by business line leadership, or by colleagues within the operations management network, to explore, in a deeper way, the operational context.  Cross-training in any, or all, operational roles and functions, provides exposure to new and useful technology resources, opportunities to apply smart technology to process, enhance internal controls, learn about our client's business and collateral, and offer operations professionals the ability to continually expand their repertoire of skills to meet new demands of a changing, and more complex, operations reality.    

Mergers and acquisitions between banks inevitably result in redundancy of systems, differences in collateral monitoring practices, differences in technological aptitude, resource quality, cultural challenges, and other factors.  Economies change and impacts to businesses can produce interesting nuances and challenges for collateral analysts.  No matter the range, complexity, or challenge that present in such scenarios, the challenges can be exciting opportunities for operations professionals. 

Operations management and career pathways

Operations management professionals in the secured finance industry often remain in this industry because it is both intellectually and financially rewarding, depending upon the complexity within, and exposure to, organization infrastructure and the organization's appetite and pace for operational progress.  Operations management is an incredible outlet for creativity and, by the very nature of operational processes and work, lends itself to a philosophy of self-driven continual improvement.  For operations professionals that enjoy building it, the secured finance operations field offers infinite opportunity to participate in projects, initiatives, and activities all designed to support a growing, and thriving, business and, over time, fills up the professional toolbox with amazing skills and experiences that will serve us well as we travel along our own career continuum.

The operations staff of today reflects the wide range of education and operations experience.  New entrants to secured finance operations generally hold bachelors' degrees in Business Administration, Finance, Accounting, and even Computer Science, and/or experienced operations professionals with focused, or broad-based, experiences in credit analysis, loan processing, retail banking, accounting, finance, or business-related college internships.  This diversity in education, job experience, and background provides a wonderfully diverse catalog of skills upon with which to leverage.  As seasoned operations professionals know, the training provided in a secured finance operation, and particularly within an ABL operation, is a ground up proposition and adds an industry-specific discipline to each professional's toolbox.

Shining the spotlight on secured finance operations

While corporate banks rarely visit college campuses to share information on secured finance operations, there are a plethora of career paths that can be taken after an introductory experience in secured finance operations.  I have known many entry-level collateral analysts over the years who have forged their own career paths toward roles as secured finance operations managers or have transferred their skills to non-bank organizations/industries, pursued and completed operations-sponsored credit analyst training, or moved into line of business roles as credit analysts.  Those of us in the industry know that credit analyst trainees, and credit analysts in roles, enjoy a competitive advantage gained through hands-on experience in an ABL operations environment.  The career journey beyond these initial plateaus is determined by a professional's commitment to excellence, consistent performance, the ongoing pursuit of learning and, most importantly, the valuable relationships formed along the way.

Opportunities exist to broaden our industry perspective on secured finance operations and its varied roles, career paths, and opportunities.  Exposure to secured finance operations can be provided to college/university students by bank or finance organizations.  Internal organization inroads can be created to provide opportunities to internal employees from non-business line areas, but who possess good transferable skills, to cross over to the secured finance world.  And, finally, building a talent pipeline between secured finance operations and its line of business can form pathways to credit analysis, field exam, lending and operations management.

Conclusion

What operations leaders know is that operations excellence must always remain the highest priority and it is the caliber and diversity of operational talent that is the engine that provides support to our internal and external clients.   Demand for operations to run with lower cost and greater efficiency also needs to be front of mind for operations leaders, however, a value-added focus on utilizing smart tools and smart people to create an effective control environment is important in sustaining its support and contribution to the business.  Operations today need to be increasingly agile and able to pivot in the face of changing work environments and factors that may impact the product/service delivery.  How organizations acknowledge and embrace the diversity and power of its operations will have a direct impact to its ability to be competitive and successful in the future.  And know that investing time, energy and money in high-quality operations talent will, in large part, determine long-term success.

Choosing a first career step into secured finance operations is a great choice as one begins to forge a career path into the secured finance industry and can lead to interesting and rewarding career experiences.  What I have learned is that most paths toward the future are rarely linear, so broadening one's perspective, approaching one's journey with a pad of paper and a loose sketch, and learning from others along the way are good ways to begin charting one's own unique career journey…and it might just start in secured finance operations.