Technology contractors working on RBS’s IT platforms are being offered retainers to ensure that they see projects through to completion as the bank struggles to attract workers to replace its legacy platform.
The Scottish bank’s technology budget just keeps getting larger and another IT meltdown on ‘Cyber Monday’, which left more than 1m customers unable to access their accounts, is another example of why it needs to spend more. Most UK retail banks operate on clunking legacy platforms that are slowly being replaced, but RBS CEO Ross McEwan admitted on Tuesday that the bank had failed to invest properly in its technology “for decades”.
The series of acquisitions at the bank – which entailed all the acquired companies being transferred on to RBS’s often inferior systems – has exacerbated the problem. In March, it said it would spend an extra £750m across 142 separate IT upgrade and improvement projects. Analysts suggested this week that this needs to rise to at least £1bn.
Trade union Unite says that the ongoing job cuts at the bank have left its IT team under-resourced. However, recruiters in the City suggest that it’s been embarking on the steady recruitment of contractors, as well as relying on consultant resources. Currently, according to recruiters we spoke to, there are around 20 new roles emerging each.
However, RBS is not paying top market rate for these roles. The contract positions pay anything from £200 a day for relatively unskilled roles like file reviewers, and £800 a day for project managers and senior business analysts. Fearful that many will leave before the end of their contract, however, RBS has been offering retainers to ensure that contractors stick around until the job is done, particularly for those working on its Project Rosetta review of its interest rate hedging products.
In theory, there’s plenty of contract resource on the market, but RBS has a couple of things counting against it, suggest IT recruiters. Firstly, it’s replacing a legacy system that requires knowledge of old or defunct technology – not surprisingly there are increasingly few people positioning themselves as experts in this area and a number of banks are competing for the same skill-sets.
What’s more, according to some disgruntled recruiters, it’s also squeezing the commission it pays third-party recruiters to 8% for 12 months, meaning many are not inclined to put the leg-work in required to find this relatively scarce resource on RBS’s behalf.