Why RBS’s tech failure means a fresh wave of infrastructure roles

Every cloud has a silver lining, and one consequence of the RBS IT failure is that banks are finally being pressured to invest in their creaking technology infrastructure. Expect jobs to emerge as a result.

The FSA is set to tell UK banks that the need to invest in outdated IT systems – which has been on the back burner for years – should be sped up. The RBS glitch, which caused over 100 million unprocessed payments over a few days and locked out millions of customers from their current accounts, has thrust the spotlight on the issue. The problem, which cost RBS £125m, stemmed from a botched upgrade to its batch processing system.

Stephen Hester said today in the bank's Q2 report: “While we have significantly increased technology spend over the past three years, there is clearly more we need to do to ensure reliability for our customers.”

This new pressure for infrastructure investment is likely to prompt banks to recruit new technologists.

“In the short term, banks are going to have to test the resilience of their batch processing systems and this means that skills in this area will increasingly be in demand,” says Chris Potter, partner in the IT assurance division at PwC. “Longer term, however, there’s going to be a growing impetus for banks to simplify their IT architecture and speed up the integration of systems taken on through mergers or acquisitions. This will mean a need to recruit transformation and infrastructure specialists.”

Currently, recruiters point to a new emergence of senior roles for business analysts who can develop a strategy to simplify the IT infrastructure – looking at efficiencies and “process re-engineering”. More recently, there are signs that infrastructure ‘transformation architects’ roles are in demand. Again, this is at the senior end and it’s anticipated that more junior positions could crop up down the line.

Does this just mean more outsourcing?

The question is how much of this work will remain in the UK. At RBS, where offshoring and outsourcing of IT functions has been on the rise, the batch scheduling upgrade was performed by staff in India. As David Chan of City University London told the Register, part of the reason for the failure could have been down to employees refusing to challenge questionable decisions by the management:

“This isn't true of everyone but in general engineers over there are more likely to do what the boss says: ‘Ok, the boss wants something cut, so we'll cut it.’ This is opposed to coming back to him and arguing against a decision. If you hire IT people in a support service function, you get a support service mentality.”

Previously, RBS had ‘old-school’ staff with a holistic view of the IT infrastructure. Employees working in an offshore centre are more likely to be focused only on their particular role.

Potter says that UK banks are going to “look very carefully” at the balance of outsourced and in-house IT functions.

“Banks are realising that the added control from keeping IT staff in-house and close to headquarters often outweighs the cost-saving achieved by outsourcing,” he says.