Banks are watching the government’s poker face before major IT outsourcing projects are signed off?
The financial services sector, and banks more specifically, are notoriously heavy outsourcers. But currently despite a big pipeline of deals expected in the future the banks could be waiting for the government to show its hand before embarking on major strategic projects.
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So what has the government got behind its poker face?
The first government hand:
The government, well the tax payer, owns large portions of banks and despite saying it will sell them quickly the shock results of the banks over the last week or so might make the shares worth retaining.
Also the banks know when they complete major strategic projects including outsourcing lots of IT they will probably be in better financial shape. So they probably don’t want to do it until the shares are out of government hands.
The second government hand:
The banks are waiting for the government to show its hand in terms of what regulations it might impose on them. This might include taxation.
One company that is confident that IT outsourcing is firmly back on the banking agenda is Harvey Nash. It says it has opened another office in London’s financial district in reaction to more demand for IT outsourcing and IT skills.
The company, which provides IT skills and outsourcing services, said: “The additional office will continue to provide talent to the Group’s existing financial services clients located in the City and Canary Wharf areas of London and also leverage new client and candidate opportunities. Forming a crucial part of the Group’s global footprint, the team will also seek to support financial services organisations headquartered in New York, Connecticut, Edinburgh, Frankfurt and Zurich who are increasingly looking to recruit talent in their London operations.”
Robert Morgan, director at consultantancy Burnt-Oak Partners says banks are currently “chatting” about projects but not signing them off. “They are waiting for the government to make its move.”