Demand for IT skillsin the financial
services sector is rising, after the "credit crunch" highlighted
weaknesses in firms' computer models,ReThink Recruitmentsaid last
week.
Banks are looking to improve the ability of back-office systems
to cope with sudden spikes in trading volumes, such as those caused
by falling share prices on the back of problems in the US mortgage
market, said the recruitment agency.
Some fund management companies and bank trading desks may need
to rebuild the computer models that determine when to buy and sell
investments.
Financial firms may also need to improve their electronic
clearing systems, some of which seized up because of high trade
volumes during the credit crunch.
ReThink Recruitment said many of the funds that invested in the
mortgage-backed securities at the centre of the crunch were quant
funds. These funds, which make trades that are determined by
computer programs using historical data, are believed to have
sustained some of the greatest losses during the market
uncertainty.
Jon Butterfield, managing director at ReThink Recruitment, said,
"Some of the funds that sustained the heaviest losses are
computer-driven, which means their trading decisions are
essentially pre-programmed. These funds will need to look at
refining and testing their computer models so that they are better
equipped to predict and respond to market volatility."
Back-office IT systems at clearing houses and exchanges that
process trades needed to be strengthened, Butterfield said.
"Computer funds tend to use the same models, so they often mimic
each other, which led to sudden surges in volumes during the height
of the crisis."
About 60% of trades on the
London Stock Exchange are now computer controlled, compared
with 40% in 2006.
Butterfield said a growth in electronic trading platforms meant
IT had become more important in financial markets - leading to
rocketing salaries for skilled staff. Some contractors can now
charge more than £1,000 a day, he said.