Could the FSA fuel tech hiring in retail banks?
Probably not. The good news is that the Financial Services Authority has outlined proposals which could compel retail banks to spend nearly 1bn on technology. The bad news is that they seem unlikely to unleash a surge of hiring.
The financial watchdog has released a consultation document suggesting retail banks should spend 891.5m over five years upgrading technology platforms in order to ensure swift compensation of customers deposits should they go to the wall. In particular, data cleansing, with firms required to ensure the existence, completeness and accuracy of customer details.
You'd have thought the obligation to spend such a large chunk of money might spur recruitment. But because the proposed changes are unlikely to be mandatory, experts are sceptical about how many job opportunities will be created as a result.
Chris Potter, partner in the technology division of PricewaterhouseCoopers, says it would take a brave bank to add headcount in the current climate. If necessary, most are likely to divert existing staff from other areas, which could avoid redundancies, he says.
Similarly, Cubillas Ding, an analyst within the banking division at financial technology consultancy Celent, believes any recruitment will be very selective. "Banks will prefer to negotiate a more gradual rather than aggressive implementation due to resource constraints," he says.
Bob McDowell, research director at TowerGroup, says banks should already have the capabilities suggested in the FSA report.
"The technology issues are simply good housekeeping. Data cleansing, obtaining a single view of the customer, storage and retrieval of data are all simple issues," he says.
