JP Morgan's tech splurge shows why IT workers are key again
JP Morgan's $1bn IT spending spree is central to its plans to increase investment banking market share and it's adding to its army of technologists to help achieve this. It's not the only firm doing so, suggesting that recruiting the right IT workers is once again crucial to gaining a bigger piece of the pie.
Across the company, JPMorgan employs some 19,000 programmers - as Jamie Dimon highlighted in the firm's Q1 results last week - making it nearly on a par with Google's headcount.
In the investment bank, this commitment to IT is paying dividends - in a recent research note, Morgan Stanley analysts pointed to how JPM is "taking share with investment spending in IT".
This year, it plans to spend $1bn on technology, with a particular focus on creating a next generation front-end derivative trading platform as well as building out electronic and algorithmic trading infrastructure for equities.
It's presenting job opportunities - in the UK alone, JPMorgan has over 130 technology vacancies across its London, Glasgow and Bournemouth offices.
"Investment banks pressed the pause button on IT investment in 2008-2009, and focused instead on becoming more cost-efficient," says Chris Pickles, head of investment banking and global accounts at BT Global Financial Services. "Now, as they look to expand again, technology - and the right technologists - are key weapons in gaining market share."
As we've alluded to previously, banks were battling for top technologists in the second half of last year. Going into 2010, this shows no sign of abating.
Bank of America Merrill has unveiled Michael Dubno, a former chief technology officer at Goldman Sachs, as head of global markets research technology. Nomura has hired Andrew Vaden from Morgan Stanley as managing director and CIO, while BNP Paribas has appointed Alain de Jonghe as CIO, capital markets transversal.
Barclays Capital has also recently recruited Jeremy Lehman as head of sales and investment banking division IT (he was formerly at Citi), and Lakh Patra as head of FX IT from BoA Merrill.
"Banks are showing a willingness to hire technologists from the top down," says Alistair Singleton, managing director of banking IT recruiters 7 Fifty Two Solutions. "Each firm has its own IT investment priorities, but the wide-spread redundancies during the recession has meant investment banks are playing catch-up and there's a renewed appetite to hire."
