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Shortages of IT talent prompting Nordic banks to focus on outsourcing

The continuing recovery of Sweden’s banking sector is feeding through into increasingly demand for IT and technology specialists and consultants – unfortunately not always based in the Nordics.

The relatively small – and therefore potentially more expensive – local IT and technology talent pool available to Nordic banks is leading to more outsourcing of technology projects to international providers, according to new research.

Business Monitor has predicted the Swedish IT market will grow by 5% a year between now and 2014, a very different picture from the 6% fall it recorded in 2009.

Investment in emerging technologies such as cloud computing will help support IT spending within the financial services arena in particular, it argued, with Nordea in April for example signing a six-year IT services agreement with IBM that incorporated the introduction of cloud computing.

“We have seen a number of high-profile contracts being awarded by Swedish banks as the market has started to grow again. Operators such as IBM have been active in offering managed services proposals within the financial services arena,” says Kenechi Okeleke, Business Monitor ICT and telecoms analyst covering the Nordics.

This emphasis on outsourcing is being driven by a combination of budgetary constraints and a lack of appropriately skilled homegrown talent.

“There is a relative shortage of local people with the right level of IT skills, which means it can be quite expensive for the banks to hire their own staff,” suggests Okeleke.

“What this of course does mean is that anyone who has the technology skills as well as knowledge of the local environment, language or culture will be in demand.

“There will be more opportunities for skilled professionals, especially programmers and mid-management-level project managers. But overall the main focus we have been seeing is on outsourcing,” he adds.

There is definitely more demand for IT and technology consultants than a year ago, agrees Mats Ohlsson, vice-president for strategy and business development at Know IT, a Nordic-based provider of technology consultants.

“There are a lot of big projects underway, some of which I suspect were probably put on hold after the financial crisis and have now been restarted,” he says.

“So there is demand for project managers, requirement analysts, test managers and developers with competence on different technology platforms. There is demand for a broad spectrum of competencies, both for long-term and short-term projects.

“As yet we have not seen any big shift in rates as a result but normally as demand increases rates will start to go up,” he adds.

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