Out with the old, in with the new
Banks are jettisoning their legacy IT system and opting for newer models, which should be good news if you're a programmer or a systems integrator.
Maintenance costs generally snaffle three-quarters of IT budget. But research group Celent expects double-digit growth in new system investment, while maintenance will grow at half that rate through to 2008.
"The focus is on modernising systems and not fixing old ones," said Celent analyst and report author Louise Westerlind.
Westerlind's predicting that automated trading, particularly in derivatives will soak up much of this spend, as companies realise the need to simplify and consolidate systems and reduce costs. As a relatively new addition to derivatives, credit default swapping will see higher activity, she forecasts.
The technology job market, which is already hot, could therefore be about to get hotter. Karen Andrews, head of recruitment at InvestIT, says pay is up 20 per cent this year for experienced people - who typically have two or three job offers to choose from.
Like Westerlind, Andrews is also predicting greater spending on new systems, with front-office over-the-counter derivatives attracting eyeballs and wallets.
Stephen Feline, a consultant at recruitment firm The Kaizen Partnership, sees "growth across the board" in the investment banking space, with salaries rising steadily, "but there's a lot of activity in algorithmic trading particularly in equities and FX."
Nevertheless, the European job market be tepid compared to the market further east. Investments in new systems will grow 3.3 per cent in Europe, but this is dwarfed by the 13 per cent rise expected in Asia, according to the Celent report.
