Should IT contractors start considering roles in retail banking?

Working as an IT contractor in an investment bank isn’t what it was – day rates have shrunk, contracts are getting shorter and there are fewer chances to move roles. Could retail banking offer some salvation?

This may seem like a strange question, particularly as more development work is heading offshore within high street banks, but there are signs that there’s a growing pool of contract for technologists in this sector.

Earlier this week, for instance, IT recruiter Harvey Nash posted some positive first quarter results. In contrast to other recruitment agencies, it tagged this success on strong growth within its financial services division, in particular “temporary roles on short-term projects” and retail banks’ appetite to take on technical staff.

Sadly, the investment banking contract market remains relatively depressed. Recruiters point to ongoing demand in areas such as risk, compliance and regulation, but little appetite to hire for front office projects.

“There was an uptick of contractor roles in April, but overall in the first quarter the number of positions was lower than we’d expect at this point in the year,” says Ben Cowan, director at recruiters Astbury Marsden.

Is it therefore wise for IT contractors in an investment bank to switch to the retail sector?

“There’s not a great deal of scope for switching from an investment banking development role into a position at retail bank, because the technologies are so different, but for project-based positions – project managers and business analysts – there are opportunities to move across,” says Stuart Rogers, associate director at recruiters Hudson’s banking and financial services division.

You would, however, have to be willing to accept a pay cut. Even with the reduction in day rates for investment banking contractors, retail banks still pay 10-15% less, suggests Rogers.  Project managers in a retail bank can expect £400-475 a day, while business analyst day rates range from £375-440, according to Hudson.