One of the accusations levelled at investment banks is that, when it comes to technology, they’re slow to innovate. What’s more, the hierarchical structure means that developers often spend more time in meetings than coding. Should you take a gamble on a smaller company attempting to develop cutting edge IT for financial services?
With the shaky job prospects and reduced career opportunities within investment banking for technologists currently, it might be worth the risk. Particularly if there’s the chance that a larger financial services organisation might eventually take a stake in the company if the product is good enough.
Inter-dealer broker Icap has quietly been investing in small financial services technology firms through its Euclid Opportunities project launched in March last year. It looks to tap into cutting edge IT in the sector and take advantage of a growing appetite for open-source solutions.
The latest investment is a $15m stake in OpenGamma, which provides open-source financial analytics and risk management solutions. Mark Beeston, chief executive of post trade risk and information at Icap said in a statement that “post-trade services are a strategic part of Icap’s business”. It’s also, as we pointed out earlier this week, where a number of investment banks are being required to invest.
Most people working at OpenGamma have a background in a hedge fund or investment bank, but it seems to be a decidedly different working environment – one man pictured on its careers site is even wearing a Hawaiian shirt. They’re hiring for a few roles currently, for developers, engineers and a quant analyst, and it seems the firm is making a conscious effort to differentiate itself from the normal IT departments of larger financial services organisations.
“No weekly status reports that nobody will read. No change control committees. No business analysts getting in between you and the information you need to implement functionality. No team of people telling you "no" no matter what the question,” it says.
This is a Google and Facebook approach with a financial services slant.
Whether this hipster attitude will last following an injection of cash from a large financial institution remains to be seen. In January, Icap invested in Model Two Zero, a post-trade services firm. At the time, it had a careers page espousing the creative working environment on offer, but it’s now been replaced by a decidedly more corporate website.
Other open-source vendors include RedHat, Marketcetera and BlackDuck.