Software and hard skills: technology is at the heart of any financial firm

The right technology is often the differentiating factor in giving a financial services company the edge over its competitors. It can also help organisations save money, so financial firms are among the biggest spenders on IT of any industry.

Investment banks, retail banks, fund managers, brokers and insurance firms all spend billions on technology. In 2012, the banking sector alone is likely to spend $173.3bn globally on IT, according to research from consultancy Celent.

The big user of technology is the trading floor and everything related to it.

Whether it is buying and selling financial products electronically, processing them through smart-order routing systems, or communicating to ensure trades go through smoothly, multi-million dollar IT projects are crucial.

“The fact that one in four people at the firm are in the technology division demonstrates the importance of this continued investment,” says Stephen Nundy, managing director, technology, Goldman Sachs. “When hiring into our team we look for innovative, analytical thinkers who are passionate about technology.”

Roles and career paths

IT roles fall into five camps: development, business analysis, project management, infrastructure and technical support.

The developer is at the coalface of the IT department. Much of the technology is developed in-house, but when financial services firms purchase software from third-party vendors, developers need to tailor it to their individual needs.

Within products traded in large volumes, such as equities or foreign exchange, developers aim for ‘low latency’ or reducing the time it takes to execute and process a trade. The speed with which a trade is placed can be crucial to its profitability.

As the name suggests, business analysts liaise between the IT department and the company to assess the business case for a particular technology initiative. Project managers will take on the new venture once it has been given the go-ahead. You’ll have to manage a team of developers, liaise with third-party vendors, and be answerable should plans go awry.

Technical support solves problems when they arise on the trading floor: glitches could cost banks millions of dollars within minutes. Traders are not shy in berating you for IT gremlins, so a thick skin is a must.

Infrastructure jobs deal with the IT nuts and bolts – from servers to operating systems to databases.

There is also the option of working for third-party vendors, which specialise in providing software to financial services firms.

If you want to work for a vendor, try sending your CV to major players such as Sungard or Oracle, or apply to specialist financial services software vendors such as Fidessa, Sophis, SimCorp, OpenLink or Charles River.

Pay and bonuses

IT in finance pay doesn’t reach the dizzy heights to be found in other parts of the financial sector, but it’s certainly very competitive. Generally, if you possess knowledge of more complex financial products, or have a comparatively rare skill set, your earning potential will be greater.

A business analyst working in an investment bank in London starts out on £35k-45k ($55k-70k), according to figures from recruiters Hudson, rising to £80k-100k ($125k-157k) at the senior end. In more specialist areas, like fixed income, this upper end rises to £95k-110k ($150k-172k).

Junior project managers are paid £50k-75k ($78k-118k), which increases to £75k-120k ($118k-188k) at the senior end, depending on product knowledge.

Project managers with three to five years’ experience in Singapore can expect S$60k-110k ($48k-87k), according to recruiters Robert Walters, rising to S$90k-140k ($71k-110k) at the more senior end.

If you work in development, being in the front office of an investment bank means more money. Junior C# GUI developers earn £35k-45k ($55k-70k), which increases to £65k-85k ($102k-133k) at the upper end, while C++/Unix developers start at the same level but can earn £75k-90k ($118k-141k) with more experience. Java developers in the front office start on £35k-45k ($55k-70k), which increases to £65k-90k ($102k-141k) at the senior end.

In fund management, Java developers earn £60k-120k ($95k-188k), depending on experience, according to recruiters Astbury Marsden, while those with C++/Unix skills earn £55k-110k ($86k-173k).

Skills sought

In IT, the majority of successful applicants will have a computer science degree, and those who don’t tend to come from a maths or physics background. However, for less technical roles, such as business analysis or project management, banks and financial services firms will also consider other degree disciplines.

“A successful IT professional will be self-motivated, organised and thorough, possessing strong analytical and logical skills,” says Ian Scott, IT manager within the fixed income division at BNP Paribas. “They will want to learn and be  able to apply experiences to their work. They will be innovative but cost-aware, autonomous but collaborative: somebody we can easily work alongside.”

If you want to move into a development role, experience with programming languages such as Java, C++ or C# is important. However, you don’t need to be a whizz kid at entry level.

Soft skills are valuable for business analyst or project management roles.

Business analysts, for example, have to be able to explain the benefits and pitfalls behind a potential technology investment, without leaving non-IT people swimming in a sea of jargon. Project managers have to be able to act as a central coordinator for disparate groups with differing interests in a particular technology endeavour.

Any IT role, though, requires a certain degree of business awareness and ability to communicate and work well with other areas of the company.

The image of the introverted nerd working in a tech position is irrelevant to today’s roles.

“First and foremost, it is key to become a business-oriented manager with technology acumen rather than just being a technology specialist,” says Krishnan Narayanan, head of IT, UBS Singapore. “You have to be comfortable challenging the business to make commercial investments and enable a balanced portfolio of both enterprise agility and cost improvement initiatives.”

Cory Woods, managing director of human resources, global consumer technology at Citi in the US, says: “My advice is to understand and engage the business, demonstrate your technical depth, look for ways to reduce complexity and manage risk appropriately.”