New banks are taking IT staff from established banks

Companies setting up banking operations are beginning to poach IT staff from the established retail banks.

Companies setting up banking operations are beginning to poach IT staff from the established retail banks.

Established banks can no longer take it for granted that they will attract the cream of IT staff, and new banks need IT workers with experience in banking.

One senior IT source at a UK bank says companies such as Tesco and Virgin Money are starting to recruit staff from the major banks.

Companies such as these are taking advantage of the fact that the names of many retail banks have been tarnished and their operations weakened during the credit crunch.

Last November, Tesco Bank invested in a core banking system to help it provide current accounts.

Metro Bank, which was set up by US entrepreneur Vernon Hill, got its banking licence in December and is building flagship branches in London.

Extra cash and opportunities

Towergroup analyst Bob McDowall is not surprised that new banks are attracting staff with experience at established banks. "These new banks need to do a lot in a short period of time. They also have the investment behind them and can pay a premium for IT staff."

He says staff who stay at the nationalised banks may face uncertainties, whereas those at new banks could be rewarded with greater opportunities.

Tesco said last year that it planned to recruit staff for its bank head office operations, including banking IT experts.

Mike Hampson, director at Bishopsgate Financial Consulting and formerly head of transactional banking at ABN Amro, says Tesco has a lot of IT workers in Edinburgh, many of whom are consultants and contractors with experience at the big banks.

He says banks which have struggled through the credit crunch might also struggle to retain the top IT staff. "As the bonuses start to dry up at the big banks, people will move."

Virgin Money has launched a bid to buy retail branches from RBS and received a £100m strategic cash injection from investment firm WL Ross & Co. Virgin Money says the new capital will allow it to "accelerate the expansion of its full-service retail bank and creation of a branch network".

New banks need a lot of IT skills to get up and running quickly. This will inevitably require workers either currently at existing banks or with prior experience of them. With the bonus culture frowned upon today, new banks such as Tesco could use their financial strength to attract the best IT staff.


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