eFinancialCareers

Technologists help banks do big business.

Banks use computers for just about everything – from communicating with staff and storing information on clients to running complex models to price financial products. They are known for having some of the world’s cutting-edge computer systems, especially for the trading floor, where financial products and commodities are bought and sold electronically.

Trends

Banks are big spenders when it comes to IT systems. According to an estimate by Celent, a research company, financial institutions’ global IT spending stood at a huge $318bn in 2006, up 8% on 2005.

Banks have been spending big money on IT because the effectiveness of systems used to trade everything from simple (‘vanilla’) equities to exotic derivatives is an increasingly important source of competitive advantage. At the same time, computers play an ever more important role in the trading process itself via algorithmic trading models, which automatically place trades based on parameters set by mathematicians.

It’s not all good news for technologists in investment banks, however. Along with increased spending on core systems, the other big trend of recent years has been to shift many programming and non-core IT roles to lower-cost locations, both out of London to other regions of the UK and also further afield. JPMorgan has been adding to the number of programmers it employs in Glasgow, for example, while Citi has been transferring programmers to Belfast. Both banks – and most other banks – are also offshoring IT roles to India.

Roles and career paths

Jobs in the IT departments of investment banks tend to fall into one of four categories: development, business analysis, project management and technical support.

If you become a developer, you could be responsible for writing the programmes that help the bank do everything from pricing and booking trades to calculating risk. The main programming languages used by banks are usually C++, Java and Microsoft’s .NET.

While developers write the programmes banks use, business analysts look at the way technology is used in the bank and analyse opportunities for making it work better. They help identify the potential for making changes to a bank’s technology systems. Once big changes have got underway, responsibility for managing them often passes to project managers who plan, structure and fulfil IT projects, or liaise with third-party providers.

Technical support staff, meanwhile, require good technical skills and the thickest of skins to handle not only the technology problems, but the temper tantrums of irate traders. It’s a role that carries a lot of responsibility – a computer problem on a trading floor lasting a few minutes could cost the bank millions of dollars. It’s up to the technical support staff to identify and resolve any glitches as soon as possible.

IT staff in investment banks also usually specialise in the IT requirements of a particular business area. While many IT staff work on the trading floor, others are based in private banking, fund management and operations, or deal with core infrastructure requirements.

“While there seems to be an almost endless supply of IT ‘foot-soldiers’ in the City, there’s a definite shortage of people who really make things happen,” says Satnam Brar, managing director of specialist ERP recruiter Maximus. “The major banks and their integrators are all focusing on individuals who’re not just good technicians. Many current systems have grown organically and now need fundamental change. That has to be undertaken by people who don’t just understand the system, but also the business behind it. Finding that duality of expertise is not easy.”

Pay

IT is not the place to be if you want to earn a multi-million pound remuneration package. However, IT salaries in investment banking are solid, with the possibility of earning bonuses of up to 20%.

“Graduates start on as much as £35k, depending on their background and technical knowledge,” says Louise Clarke, head of IT recruitment at consultants Robert Walters. “Bonus potential depends on the area they go into and the length of their graduate programmes, which can be three to 18 months. The sooner you can get into a core business environment, the sooner your bonus potential will increase.”

Skills

Technical skills are obviously important: “Most IT graduate schemes in the City won’t hire without academic experience of software,” says Robert Walters’ Louise Clarke. “They want evidence of good computer skills already, although they’ll also take people on with strong science, engineering or maths degrees.”

But technical ability is not enough. ‘Soft’ skills are also necessary: “People need to demonstrate good written and oral communication, as well as presentation,” says Derek Walker, head of campus recruitment at Barclays Capital. “We don’t hire people whose ability is purely technical but who have limited interpersonal skills. We need them to be technically smart but also able to talk to people throughout the business in a down-to-earth way.”

“A key asset is to be able to explain technology to the business in terminology they will understand,” agrees Laura Everingham, graduate recruitment manager at investment company Fidelity International.

Project managers need to be able to multi-task and work on several things at once, according to Matt O’Hare of recruitment consultants Hays City: “As project manager, you’re the central coordinator – controlling the budget, looking after all the stakeholders, smoothing the continuity of each project and ensuring they hit key milestones.”

This often involves working alongside and overseeing more than one set of people, according to Gurdev Sihre of M&G: “You need to be a team player, understand where everyone is coming from,” he says. “Project managers initially work with a team of analysts, then the developers and testers, then the users. Each has different priorities, but they’re all valid.”