FinTech M&A activity doesn't necessarily spell bad news for jobs
After a year of lying fallow, M&A activity within the financial technology vendor sector looks set to pick up again in 2010. In normal circumstances, staff would be biting their nails in anticipation of redundancies after such a move, but there are reasons to believe that jobs will be relatively safe.
In the last few months, confidence has gradually returned to the FinTech arena and companies that have fared well in the recession have taken the opportunity to snap up cash strapped rivals.
Examples in the last week alone include First Derivatives buying Irish FX dealing systems provider Cognotec, and Sybase's acquisition of complex event processing vendor Aleri.
The fate of staff within these firms is not yet clear, but there's no reason to assume such deals will imply significant job cuts, suggests Andy Morgan, TMT sector leader, corporate finance at PricewaterhouseCoopers.
"It's hard to imagine that firms would cast to one side the skill-sets tied to application development and technical support," he says. "It's a chance for vendors to spread development costs across a broader range of applications. However, there would be consolidation of back office functions and possible casualties within the salesforces."
Recovery in financial services technology budgets, combined with a pick-up in the FinTech sector and a need for firms to offer a fuller range of products to a broader customer base will drive more M&A activity in 2010, suggests Morgan.
Simon Masters, head of recruitment for electronic trading vendor Trayport, says that firms have regained their appetite for hiring again, having ridden through the turbulent times in 2009.
"Virtually all companies in the financial technology sector are going to be recruiting this year," he says. "From a technical perspective, considering the amount of hiring anticipated in 2010 and the subsequent shortage of talent, to make redundancies as a result of a merger or acquisition could be potentially damaging."
