IT in finance

Software, hard skills and a thick skin

The right technology is often the factor that

gives a financial services company the

edge over its competitors. It can also, in

the long run, help organisations save money.

Not surprisingly, therefore, firms in the financial

sector are among the biggest spenders on IT.

Investment banks, retail banks, fund managers,

brokers and insurance firms all spend billions

on technology. In 2010, financial services

firms are expected to spend US$357bn

on IT globally, according to research from

consultancy Celent.

The really big user of technology is the

trading floor, and everything related to it.

Whether it's a question of buying and selling

financial products electronically, processing

them through smart-order routing systems,

or communicating to ensure that trades

go through smoothly, multi-million dollar

technology projects are crucial to successful

operations.

After a period of shrinking IT budgets and

cancelled projects throughout 2008/09, financial

services firms have again focused on frontoffice

technology, prompting something of

a hiring spree in the sector.

Roles and career paths

Within financial services, IT roles tend to fall into

four camps - development, business analysis,

project management and technical support.

As a developer, you are at the coalface of

the IT department. Although some of the

job will involve developing new systems

in-house, banks often purchase software

from third-party vendors, their

developers tailoring the software to

suit the institution's particular needs

or integrating it into existing systems.

Developers aim for 'low latency' or

reducing the amount of time it takes

both to execute and process a trade.

The speed with which a trade is placed can be

crucial to its profitability, and may be as little as

microseconds.

Business analysts effectively act as the liaison

between the IT department and the company,

investigating how technology can be used to

improve the bank's competitive advantage.

Meanwhile, project managers will take the

reins of the new venture once it has been

given the go-ahead. Project management is a

strategic role involving planning, structuring and

eventual completion of the projects. You'll have

to manage a team of developers, liaise with

third-party vendors, and be answerable to the

business should plans go awry.

The people in technical support solve

problems when they arise on the trading floor.

This might sound simple, but glitches could

cost banks millions of dollars within minutes.

And traders aren't shy when it comes to

berating you for their IT gremlins, so a thick

skin is a must.

If you don't want to work for a bank, there's

the option of working for third-party vendors,

which specialise in providing software for a

particular sector. Try sending your CV to major

players such as Sungard or Oracle, or apply to

specialist financial services software vendors

such as Fidessa, Sophis, OpenLink or Charles

River. Vendors generally pay less but can

provide a good training ground to develop

your technical skills.

Pay and bonuses

IT pay doesn't reach the dizzy heights to

be found in investment banking, but it's not

pennies either. Generally, if you possess

knowledge of more complex financial products,

or have a comparatively rare skill set, the

greater your earning potential.

A salary survey by IT headhunter JM Group

revealed that a vice president business analyst

working on exotic derivatives can earn up to

US$140k in the UK; those working on simpler

'vanilla' products can get US$135k for the

same position. In Hong Kong, a programme

manager with over eight years' experience

can expect US$130k-255k, according to

recruiter Hudson's 2010 salary survey. A C++

developer with over six years under their belt

can earn US$90-155k.

Skills sought

The vast majority of successful applicants will

have a computer science degree, and those

who don't will come from a maths or physics

background. If you're seeking a development

role, experience with programming languages

like Java, C++, C# or Microsoft's .Net is

essential, but this is not to say you need to be

a whizz kid at entry level.

"Many will have a background in computer

studies but we often find that it helps to be able

to offer computer studies with something else,"

says Matthew Widders, global head of rates

support/EMEA FI support manager (technology)

at Citi. "Recent examples have included

artificial intelligence, finance, economics and

psychology. If you have not done computer

studies, that does not necessarily rule you out."

Technical skills will be nurtured, but the learning

curve is steep. "Entry-level positions have

become much more competitive over the past

two years," says Victor Lebreton, manager

of Paris-based electronic trading firm Quant

Hedge. "Don't be afraid to do internships

and learn as much as you can. But do not

exaggerate your skills, because you will

be found out."

Soft skills are valuable when it comes to

business analyst or project management roles.

Business analysts have to be able to explain

the pros and cons of a potential technology

investment without leaving non-IT people

swimming in a sea of jargon.

Project manager roles, meanwhile, are

essentially management positions for

developers, and you'll have to act as a central

coordinator for disparate groups with differing

interests. Even in highly technical roles, soft

skills are key, says Dipen Shah, an IT risk

analyst within fixed income at BNP Paribas:

"You could be dealing with queries from

traders looking for support on applications

or complaining that something is inaccurate,

liaising with developers, or co-ordinating with

managers from mid- and back-office teams."