Financial services firms are embracing contractors with no experience of the industry.

“This year is going to be the year, when because of the ramp up of demand, clients will look at people not in investment banking but in retail and telecoms,” says Marilyn D’sa, sales director at financial IT recruitment firm OTC.

She tells us one banking client is looking to recruit 400 people this year, with the result that “exceptionally bright candidates with the right mentality and ambition” may be able to break through the hermetically sealed City bubble.

D’Sa has already placed one such determined candidate, who on top of first-class IT pedigree, impressed the client by reading and researching as much as possible about the industry.

But although the market is exceptionally buoyant, Philip Lee, manager for banking IT at recruitment firm Jonathan Wren, says it’s still extremely difficult for contractors to break into the City without relevant knowledge.

“Banking never changes. You need product and technology knowledge. Being a good developer is just a base line, you also need industry knowledge,” Lee says.

He points out that contractors are brought in to solve particular problems, so companies are looking for very specific expertise rather than just technical know-how.

The stakes are high. Lee says experienced senior contractors can earn up to 1,000 a day in the City – considerably more than in other industries. For example, a good Java developer contractor in retail earning 400 a day could double that in the City.

Unfortunately, competition for places looks set to remain intense. A tail-off in demand for contractors in the public sector is luring more contractors to the City.

“At one point, the public sector was about equal in terms of opportunities for contractors – it’s definitely not like that now,” says Lee, who noticed demand beginning to drop six months ago.

D’Sa says that key skills in demand in banking at the moment include C# with Java in equities, C++ win side, Quant developers and infrastructure specialists.