The truth about technology jobs in banks (and how to find the exciting ones)

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The truth about technology jobs in banks (and how to find the exciting ones)

If you thought big banks are such big spenders on technology that they're actually "tech companies" in disguise, you might want to take a long, hard look at some of the recent reports coming out of UBS's Evidence Lab. In the past few months, UBS has been scrutinizing what banks say about their technology spending. It's concluded that there's not a whole lot of visibility about what's going on there.

As a reminder, big banks make some big claims about how much they spend on technology. Goldman Sachs, for example, said it spent $1bn on technology last year, up from nearly $900m the year before. JPMorgan says it spends $10.8bn. Bank of America spends $10bn. Wells Fargo spends $9bn. Banks are big technology spenders. 

Or are they? UBS's analysts note that there's not actually a whole lot of visibility around what banks are spending those technology budgets on. Only one bank, Commonwealth Bank Australia, actually breaks out how it spends its IT money in any detail. In 2018, CBA said only 40% of its A$1.7bn budget for technology went to application maintenance and development. A huge 25% went to software amortization - writing-off the value of old software which isn't used any more. Not so exciting after all.

UBS did some extra research, which breaks out exactly what banks are up to with their technology spending at an industry level. These findings are shown in the chart below. 

As the chart shows, banks' biggest area of IT spending is security - keeping customers' data safe. What comes next depends upon where you work. 

If you work for a 'small bank' with less than $100bn in assets under management, it's quite likely you'll be working on the horror of maintenance or core systems modernisation - both of which sound a lot like euphemisms for the horror that is legacy technology.  But if you work for a big bank you'll have more chance (although still not a huge chance) of working on the exciting stuff in 'innovation.'

In other words, if you want an exciting and innovative technology job in banking go to the big players. - Go to the big players for the jobs in cloud computing (witness JPMorgan's expansion in Seattle) and data engineering, both of which rank higher up large banks' list of priorities. By comparison, UBS says smaller banks stand to struggle to attract "top talent" given that their technology spending seems to be going to less exciting things than big banks and technology companies.

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