Rise of the quants at Goldman Sachs
In investment banking technology, the suits rule. With IT budgets running into hundreds of millions, how technology will impact the bottom line is an executive concern and the core developers and architects who do the legwork face (another) glass ceiling.
As Kirat Singh, long-time senior technologist at the likes of JPMorgan and Bank of America Merrill Lynch, told us previously, those running the show in IT “haven’t written a line of code in 20 years” and it’s difficult to progress as a technologist unless you’re prepared to sacrifice being a hands-on developer.
Goldman Sachs insiders, however, tell us that there’s a subtle shift of power within the technology teams, to the point where it’s the uber-technical guys who are gaining ground at the top. Since the shake-up of Goldman’s senior technology ranks at the tail end of last year – when R. Martin Chavez took over from Steve Scopellite as chief information officer, and Don Duet and Paul Walker were installed as co-heads of technology – the ‘strats’ have been taking over, suggest our sources.
Chavez heralded from Goldman’s ‘strats’ team, which is largely a quantitative function with the ‘core strats’ building complex models across the bank's trading desks. So did Walker, who joined the bank as a vice president in the FICC strats team in 2001. Most are not pure technologists – heralding from a science, maths and engineering background – but are still very computational.
The good news for technologists hoping to make to the upper echelons of investment banking is that Goldman appears to be embracing the idea that technical people should remain in charge. This is reflective of the strategies rolled out by Silicon Valley firms – Google, for instance, has a dual management track for both programmers and less-hands on types. It is these firms, after all, that the banks are competing with.
Nonetheless, this hasn’t sat overly well with some the IT staff at the bank, who feel the balance of power has shifted towards the quants. Headhunters tell us that since the departure of Mike Grimaldi, who joins Deutsche Bank in July as CIO for its corporate banking and securities division after more than 20 years at Goldman, some senior technologists at the bank have been looking for pastures new.
Nonetheless, Goldman continues to offer a lot of opportunities for technologists – at least 25% of its employees work in tech. Lloyd Blankfein says that the bank is a “technology firm nowadays”, while Walker’s LinkedIn profile invites technologists to get in touch with the bank’s HR teams.