Barclays Capital has unveiled plans to recruit 500 IT professionals for a new tech centre in the Ukraine. While it would be easy to pass this off as an attempt to tap into cheaper labour sources, there are other incentives for banks to look to Eastern Europe for tech talent.
BarCap is teaming up with local software engineering service provider, EPAM Systems, which will build and operate the new tech centre in Kiev. It already employs 50 engineers, but by the end of 2012 that figure will rise to 500. The bank also aims to add 800 IT professionals globally this year.
The jobs being created in Kiev are fairly high-end development roles. The teams will focus on in-house IT projects ranging from developing electronic trading applications to risk management systems in C++, Java and C#.
"Kiev is a key strategic centre within our technology growth plans going forward," said Sarah Grave, head of IT EMEA, Prague and Kiev at Barclays Capital.
Obviously, it's not a new phenomenon for banks to look to Eastern Europe for IT functions. BarCap itself already has a technology centre in Prague, as does Commerzbank, while Citigroup and UBS run service centres in Poland. Deutsche Börse also shifted some 270 tech roles from Frankfurt and Luxembourg to Prague in March.
While the latter was part of a cost-cutting programme, it's doubtful whether this is the only motivation for banks running IT functions out of Eastern Europe.
"Obviously, as it's still a developing country, salaries are likely to be substantially less in the Ukraine, but this is not the only issue," says Rajeena Brar, consultant at IT think-tank Pierre Audoin Consultants. "It allows them to make better use of a global delivery model and there's also a huge pool of innovative IT talent in Eastern Europe that banks are keen to gain access to."
BarCap has cited strong local technical talent and analytical skills available as the primary motivation for the move. This in itself could have UK IT professionals getting a little hot under the collar.
However, financial product knowledge on top of technical expertise has often been a competitive advantage for UK-based development staff. Worryingly, perhaps, BarCap is looking to bridge this gap for its Kiev employees by offering financial services training in London, Singapore and Johannesburg.