When an investment bank describes itself as a “technology company”, it’s understandably greeted with a sense of cynicism. They are, after all, in the business of making money and IT has always been an enabler of this, rather than a central function of the organisation.
Banks are big spenders on technology though - $59.2bn in Europe alone this year, according to consultants Celent – and employ more people than most large IT firms. J.P. Morgan, for example, has an army of 30,000 technologists worldwide and one in four (or around 7,000) of Goldman Sachs’ employees work in an IT function.
And while graduate recruitment in the front office has been scaled back, the intake for technology programmes has either been increased or remained flat year-on-year. Despite all this, the roles aren’t exactly popular.
Banks are flooded with applications for their sales & trading and investment banking division programmes – around 140 for every available role, according to the Association of Graduate Recruiters – while technology typically attracts 10 per position, according to the recruiters we spoke to.
They face stiff competition from large tech companies like Google and Microsoft (still the most desirable graduate employers, according to new Universum rankings) as well as entrepreneurial companies like those popping up in the ‘Silicon roundabout’ in Old Street, London.
The fact is, though, investment banks recruit graduates into project management, business analysis, development and support roles and there are many reasons you might want to work for them. These, according to senior technologists in investment banking, are the main ones.
1. The pay may not be front office, but it’s still very good
The likes of Google, Microsoft and Facebook may pay starting salaries of $59-86k (£36-53k) in the US, but in the UK you’re more likely to be given a distinctly average £20-35k. Starting salaries for technologists in investment banking (in London) are around £36k, according to recruitment sources, but the earning potential is greater further up the ladder.
A Java developer in investment banking earns between £60-120k, according to recruiters Astbury Marsden, with the potential for a £26k bonus.
“There are examples of technologists who joined the organisation in the late-90s as graduate trainees and have now made it to managing director or director level, so long-term career progression is definitely possible in a banking IT role,” says Phil Kent, a managing director of Credit Suisse in the information technology division.
If you make it to MD level, expect pay upwards of £500k.
2. Increasingly, banks are offering their employees the chance to innovate
‘Google days’ or the chance to work on a personal project are unlikely to take off in the corporate culture of an investment bank. However, they are increasingly offering the chance for technology staff to flex their creative muscles.
J.P. Morgan, for instance, tells us that it has ‘Pitch it’ initiative globally, where employees get the chance to undergo a ‘Dragon’s Den’-style process to get the go-ahead to work on ideas they have. Credit Suisse’s Kent says that developers ideas are “actively encouraged and supported”, including a project where they latched on to an internet portal called Stack Exchange. Goldman Sachs, meanwhile, runs an annual innovation award for its tech team in Europe.
3. Banks are rarely first-movers, but when they adapt a new technology, they invest heavily
Banks have a reputation for being slow to innovate. When the next big thing emerges, compliance issues and a hierarchical corporate structure mean that they rarely embrace it with both hands. However, they have the financial firepower to really plough money into technology one they give the go-ahead.
Take cloud computing and app development for smart phones and tablet. After skirting around the edges for years, investment banks have finally embraced them.
“We’ve investing heavily in mobile and tablet platforms, both commercially and for the benefit of our employees, as well as in our own private cloud,” says Stephen Nundy, a managing director in the technology division of Goldman Sachs. “These are just two examples of how banks embrace the latest innovations in technology.”
4. There’s never an investment in technology, if a ‘tangible product’ doesn’t emerge
Depending on your perspective, this is either a positive or a negative; there’s always a clear point to whatever is developed in an investment bank. While research and development centres are happy to experiment, something that appeals to a great many technologists, investment banks will never sign a project off unless the business imperative has been spelled out.
“We’re continually investing in smarter ways of doing things – whether that’s improving the latency of a trading system or improving our FX e-Commerce platforms – or we can fall behind the competition,” says Kent. “Investment banking technology is all about solving problems in a clever and innovative way. This is a different focus from pure research and development, which may ultimately not yield anything.”
5. Technology is a support function, but it’s still very important
The benefit of working for a small IT company is that the technology is the product, but investment banks have yet to elevate their technologists to the same level within the organisation as revenue generators. However, to suggest it’s a mere support function would be wrong.
“One of the biggest challenges we face when attracting graduates is that technology can often be perceived as a bit of a backwater in the organisation – but nothing could be further from the truth,” says Simon Cooper, CTO for the Corporate and Investment Bank tech core processing group at J.P. Morgan. “We invest in IT on a massive scale and are continually looking to be at the leading edge because this is one of the major things that gives us our competitive edge.”
“If you’re purely interested in technology and highly resistant to a corporate environment, then perhaps working for an investment bank isn’t for you,” adds Nundy. “However, working here gives you the chance to focus on real-life technology problems with a financial sector spin, and innovation is part and parcel of that.”
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