City investment banks continue to recruit risk techies

Investment banks are continuing to make up for their previous lack of spend on risk management technology. In London, at least, they seem to be rolling out their own systems, creating a sustained spike of recruitment for techies with expertise in this sector.

"We've seen a massive demand in the areas of credit, operational and market risk technology, though the majority of roles are on a contract basis because of the finite nature of the projects," says Alistair Singleton, managing director of banking IT recruiters 7 Fifty Two Solutions.

A survey of 250 financial institutions by technology vendor Aleri showed that just 26.4% of hedge funds and 50% of banks feel they have adequate real-time risk technology in place and 50% of respondents intend to up spending in this area to make amends.

"In London, the most interesting thing that's driving the hiring in the risk management space is that banks are keen to build or add-on bespoke systems, rather than buying one off-the-shelf," says James Richmond, sales director at IT recruiters Cititec. "There's also been a lot of churn at the senior end, and new managers running the IT desks are keen to make their own mark, which is adding to demand."

This is particularly interesting when you consider the much larger costs associated with building your own risk systems. As the table below (courtesy of FinAlternatives 2009 technology survey) shows, in-house systems can cost up to $1m more than vendor systems.

Singleton adds that banks have yet to start paying a premium for risk management IT expertise: "There's demand there, but hasn't reached the point where there's a war for talent to drive up rates."

Source: FinAlternatives