Technology is intertwined with financial markets, with some of the bigger investment banks employing as many people in IT as the large tech companies.
J.P. Morgan for instance has around 30,000 technology staff globally, 25% of all Goldman Sachs employees work in IT and Credit Suisse has 3,000 techies in Asia alone. Investment banks, retail banks, fund managers, brokers and insurance firms all spend billions on technology. In 2014, the banking sector alone is likely to spend $188bn globally on IT, according to research from consultancy Celent.
The right technology is often the differentiating factor in giving a financial services company the edge over its competitors. It also helps them save money, and comply with increasingly onerous compliance requirements demanded by financial regulators.
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 technology projects are at the centre of any banks’ strategy.
"Financial markets are crucially dependent upon technology - my favourite quote is from a CEO I worked with who said investment banking is technology surrounded by people and capital,” said Alastair Brown, chief information officer, international banking, Royal Bank of Scotland.
Jobs and career paths in investment banking technology
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 banks purchase software from third-party vendors, developers need to tailor it to banks’ individual needs. Banks also employ solutions architects, which act as the link between development, design and management and oversee the technical elements of projects.
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. More products, notably corporate bonds in the past 12 months, are being traded electronically.
Business analysts liaise between the IT department and the company. 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.
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.
Skills demanded from investment banking technologists
In IT, the majority of successful applicants will have a computer science degree, and those who don’t tend to come from a maths, physics or engineering background. However, for less technical roles, such as business analysis or project management, banks will consider other degree disciplines.
“A successful technology professional will be self-motivated, organised and thorough, possessing strong analytical and logical skills,” said Gavin Jackson, head of rates tactical quant development at BNP Paribas. “They will want to learn quickly and be able to apply experiences to their work. They will be innovative but cost-aware, autonomous but collaborative; somebody that 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 manager roles have to be able to act as a central coordinator for disparate groups with differing interests in a particular technology endeavour.
More than anything, though, technologists need to be adaptable and not only survive, but thrive in, a changing environment. “The great thing about a career in technology, especially one in a fast-paced, dynamic industry like investment banking, is that if I answer a question, it’ll change in six months’ time,” said William Mitchell, head of domain - trade lifecycle at Deutsche Bank Global Technology, Cary Technology Center in the U.S. “Adaptability, listening and an ability to climb a learning curve are key skills for success.”
“In this 'digital age' there is no escaping the sheer rate of change and progress and constantly challenging how these new developments can improve your industry,” added RBS’s Brown.
Stereotypical IT nerds also need not apply. Banks want their technologists to be both technically proficient and understand how their work is going to affect the bottom line. Technology is getting closer to the business of investment banking, so business acumen will help accelerate your career.