London's investment banks have gone on an IT hiring spree as the industry accelerates its investment in digital technologies and acts to replace staff lured away by the promises of riches from fintech startups, according to fresh data from recruitment outfit Astbury Marsden.
City hiring activity in October increased 46% on the same month last year says Astbury Marsden, with 3400 news jobs created during the month.
The firm says that robust hiring activity in the City is being driven by renewed investment by banks in the 'digital agenda' to deliver cost savings, improved performance and help meet regulatory targets.
Adam Jackson, director at Astbury Marsden, comments: “There has been a sea change in how firms view investment in IT over the last year in the City. Investment in IT is no longer being seen as a cost but as a key to unlocking better long term profitability for the sector.
"This next wave in the digitilisation of banking sector processes is already having a profound impact on hiring activity at the large investment banks and this is set to continue well into 2015 and beyond.”
Regulatory imperatives are driving much of the demand as banks begin the arduous process of ring-fencing their retail and investment banking arms, shoring up collateral requirements and investing in real-time initiatives to drive down risks and costs and unlock the hidden value in large data sets.
A new research paper from SunGard forecasts that banks are likely to spend more than $8 billion in the next six years to improve technology platforms to meet demands to beef up how they manage and report risks.
Pressure on IT hiring is also coming from the boom in fintech startup activity in London, which is increasingly luring talented technology staff away from the investment banking sector. As well as offering potentially lucrative stock options contracts, the startup scene is also considered more rewarding for the brightest developers who value the opportunity to develop new programmes and technologies from the ground-up.
“We’re already seeing the smaller fintech companies snapping up some of the best technology staff from the investment banks," says Jackson. "Banks do not just have to compete with their peers for these staff but also have to find a way to make the roles they have to offer more attractive than those opportunities being created by this new breed of start-ups.”