With banks and securities firms tightening their belts, technology budgets in these sectors have inevitably been impacted along with the appetite to recruit IT professionals in voluminous numbers. In the fund management sector, however, things are still looking up.
In the PwC/CBI Financial Services report released earlier this week, the expectation for 2012 is that banks’ tech spending will remain flat, that securities trading firms’ tech budgets would be on the slide, but that investment management firms would be generally increasing their IT expenditure.
The primary motivation for fund managers to spend on IT is to cut costs in the long term, however, says Chris Potter, technology assurance partner at PwC.
“The key issue for fund managers currently is how they can reduce the cost of transactions and pass those savings on to clients, which in turn would help retention,” he says. “This means a lot of investment into straight through processing systems and transaction cost analysis (TCA) technology.”
In some cases, fund managers are looking to outsource this development work, he suggests, other firms are taking third-party packages, but larger houses tend to favour developing these systems in-house.
“Some fund managers are investing in IT headcount, but others are still cutting costs and reducing headcount – there’s no singular pattern,” adds Potter.
Still, Nick Finlay, head of investment manager at Hays Finance Technology remains relatively bullish about job prospects for IT professionals in asset management.
“There’s ongoing recruitment for technologists to work on pricing systems, database professionals and automated document creation systems,” he says. “However, there’s one thing that continues to drive technology hiring – regulation.”
UCITS IV, particularly the requirement to produce, distribute and maintain Key Investor Information Documents for funds and sub-funds in every language and market, is causing a technological headache, he suggests and is prompting firms to expand their teams.
“Regulatory change continues to shape fund managers’ technology budgets, and firms are having to work harder to address that agenda,” adds Potter.