Slowly, but surely, cloud computing is gaining more traction within financial services. While this presents some opportunities for technologists in the long term, certain positions are likely to be eliminated.
This week State Street revealed that it was cutting 530 "non client-facing" IT staff in the US (and transferring 320 to IBM and Wipro Technologies) as part of a transformation programme first unveiled in November aimed at saving $575-635m by 2014.
A lot of those employees affected by this announcement work in infrastructure, application maintenance and support systems. At the same time, those retained will be focusing more on "research and development, including further innovations such as private cloud computing that will create more sophisticated, client-facing solutions and services".
This is the second time State Street has mentioned cloud computing in tandem with IT redundancies and it doesn't take a genius to determine that when applications and infrastructure are virtualised into a shared 'cloud' environment, the roles above become surplus to requirements.
The cost savings related to cloud computing for banks and financial services firms could be huge, though. Research by consultants EMC and the Centre for Economic and Business Research (Cebr) released in February suggested that firms in EMEA could save €183bn over five years, which could free up enough cash to create 207,000 jobs.
"For technologists, however, we found that overall IT headcount would be down," says Oliver Hogan, managing economist at Cebr. "There would be some redundancies, particularly in infrastructure, but there's the potential for IT professionals to be redeployed to more high value roles, such as software development."
Despite the fact that more banks - such as Bank of America, Deutsche Bank and Morgan Stanley - have made tentative steps towards cloud computing (albeit primarily through private clouds), there are few signs that any IT jobs are emerging.
Adam Pizzie, manager of the IT division at Robert Walters says that banks are hiring people for virtualisation projects around infrastructure and data centres, but so far they've not been mandated for specific cloud computing roles.
The Amazon cloud crash in April certainly hasn't done anything to address banks' concerns about the security and reliability of cloud computing, suggests Larry Tabb, founder and CEO of Tabb Group.
The fact that cloud computing works better for "stateless computing, such as web servers, data distribution" rather than transactional tasks has also led to a reticence from financial services organisations, he says.
"Things are getting better," adds Tabb. "We are seeing more and more transactional services being offered in a cloud. Even mission-critical (private) cloud solutions are available, including execution and order management systems."