The investment banking stars of the future will be in IT

If you want to see the big-swingers of the future in investment banking, don’t look on the trading floor – they’re more likely to senior employees based in the technology teams.

With IT budgets more restricted, and banks realising the benefits of getting the right person in place to lead secure a bigger competitive advantage through technology, there’s a quiet battle for talent at the senior end of investment banks’ tech teams.

“All the banks are trying to steal a march on each other, and realise this is no longer through poaching a team of traders, but by bringing in the right CIO or CTO, who can then draft in his trusted lieutenants with a proven track record,” said Paul Bennie, managing director of IT in Finance headhunters Bennie MacLean Associates. “It’s a very limited pool of talent.”

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In recent months, senior technologists have started jumping to competitors. Credit Suisse has hired both Scot Baldry, Goldman Sachs’ chief technology officer for fixed income currencies and commodities (FICC) as its new global head of IT investment banking strategy and architecture as well as Denis Roux, managing director and former global head of FICC technology from the US bank. Mark Ashton-Rigby, CIO for UBS’s investment bank, has left to join J.P. Morgan in New York as head of banking technology, while the Swiss bank has also hired Oliver Bussman from SAP to replace outgoing group CIO, Michele Trogni. Barclays, meanwhile, has named Shaygan Kheradpir as its new head of operations and technology.

Investment banks’ technology teams are becoming ever-more vast, spanning offshore and nearshore locations as well as being close to the trading floors in more established financial centres like London and New York. J.P. Morgan employs 30,000 technologists worldwide, for example, while around a quarter of Goldman Sachs’ staff (or 8,000 people) work in IT.

Not only are senior technologists tasked with overseeing huge teams, but they’re increasingly responsible for generating trading profits – as more products are traded electronically – as well as bringing in revenues from digital applications and e-Commerce platforms. Not surprisingly, most new CIO/CTO hires are being elevated to board level.

“Investment banks are becoming increasingly aware of how technology permeates every aspect of their business,” adds Shawn Banerji, executive director within the financial technology division of headhunters Russell Reynolds Associates in New York. “This means taking on people who can not only deal with the influx of regulatory requirements weighing down technology requirements, but banks also want true innovators.”

In the past, it would have been acceptable for banks to hire people who could minimise technology costs, create value and complete projects on time, and on budget. Now, however, investment banks want people who can drive innovation across the business and this has made recruitment even more difficult, argues Banerji.