Further indications that investment banking techies should work for a vendor
If you wanted to check the pulse of the technology vendors that supply trading software to broking firms and investment banks, it's worth looking towards Fidessa as something of a bellwether.
The firm reported relatively positive results this week – profits were up by 8%, to £43.2m for 2011 on revenues 6% higher at £278m – but the reduced spending power of larger players and the tough times that continue to hit its smaller clients still present challenges.
From a recruitment point-of-view, however, it's a rare beacon of light. While banks have trimmed their tech teams, Fidessa has hired.
Headcount stood at nearly 1,750 at the end of last year, an increase of 10% on 2010. In Europe, employee numbers rose to 870 and most of the recruitment was focused on its technical and product development divisions.
Even with the headwinds faced in 2012, Fidessa says that it will extend into derivatives this year and help its larger clients on cost-cutting programmes. It will invest in "expertise required to support these initiatives".
Is this an indication that trading technology software houses are generally increasing their headcount? James Richmond, sales director at IT in finance recruiters Cititec, believes so.
"Many of the trading technology houses have been attacking new markets both geographically and vertically," he says. "Firms on the ascendency have not let up on hiring. As a collective the industry has increased its recruitment rate and trading consultancies who deliver projects for the vendors have also been hiring."
Many investment banks are having to funnel more of their IT budgets towards both maintenance of their existing platforms and technology initiatives related to mandatory regulatory project. We've mentioned previously that this has benefited technology vendors, which have been building their teams, and this is continuing.
"Senior IT professionals in investment banks are now talking about the need to buy trading systems and then bring in consultants to adapt them to their needs, rather than starting from scratch," he says. "With cost-control high on the agenda, the imperative to consider off-the-shelf solutions is higher than ever."
The result of banks' more austere attitude to IT is that consultants are also having to build up headcount he suggests, and that technologists finding themselves tossed out by the banks are now viewing vendors as a more attractive option.
Pay is still slightly higher within the banks, but with an increasing number of IT professionals receiving zero bonuses this year, the differential is diminishing.
"Remuneration is no longer such a differentiating factor," says Elworthy. "Investment banks' appetite to recruit is muted, and trading software vendors are offering some exciting opportunities. This is persuading some people to move across."
