The flow of cash through money markets, investment banks, insurance companies and the rest of the UK financial sector is now heavily reliant on IT.
Developments in the sector are being driven both by compliance and security requirements, as well as the growth of e-commerce. Opportunities in the most lucrative of the financial institutions are also opening up after some difficult years. According to recruitment specialists, confidence in the City is sparking a demand for IT developments to handle the trade in increasingly diverse financial products.
Mike Bury, director of business information systems at Legal & General, said, "Transaction speed is very important and transfers and tracking are important. Given the volumes, the only way you can do that is with IT systems. And as every year goes by, a greater proportion of business is carried out over the internet."
Suppliers face the challenge of tight integration between IT, the wider business and a fast-moving technical environment, particularly in the City, where the race to sell new financial products can drive the development of a new trading floor application in a matter of weeks.
"The biggest dilemma for people coming in is you need experience of the finance sector," said Ann Swain, chief executive of the Association of Technology Staffing Companies (Atsco). "To earn big money, you need a sound understanding of finance."
This is why Neil Pilkington, of ReThink Recruitment, urges people looking for a front-office job in an investment bank to be realistic about what they have to offer. There will be opportunities for people with C++ and Java development skills - if they are bright, good communicators and are "at the pinnacle" of their current fields, he said. Experience with software suppliers producing financial services tools, or in outsourcing firms with finance sector contracts, will help.
Marilyn D'Sa, sales director at City IT recruiting firm OTC, emphasised the demand for business-facing people who understand financial products and how they work. "Financial Services Authority exams carry a lot of weight and show you are serious about investment banking and the financial market."
Sameer Shah, senior consultant at the Progressive Banking and Finance recruitment agency, said people need genuine interest in the products and the market. "Lots of [unsuccessful] candidates haven't gone away and done their homework."
D'Sa suggests gaining experience of the investment bank environment in a back-office job as one route to a front-office role. "You can move in from engineering, telecoms or insurance."
Insurance firms offer an important route into the sector, with recruitment focused on electronic delivery of products and services. At Friends Provident, senior IT manager for resourcing, Chris Green, said, "Most of our development is around improving the customer feel and how they interact with our systems."
Web skills and e-commerce experience are in demand, he said. But while technical skills in Java, ATG and PL1 programming are important, personal qualities may carry more weight.
Bury said, "The main thing is good communications. You have to be able to communicate with different business people and third party suppliers."
He advised would-be employees to go through specialised recruitment companies.
Christine Wilson, head of demand and deployment at Prudential's IT division PruTech, said, "We're looking for people with a Java background who have experience working in large corporations." And while financial knowledge is a bonus, experience of sizeable projects and understanding customer needs are more important. People who know their way around legacy systems are also in demand.
"You can come in as a mainframe programmer and perhaps move into Weblogic. It has opened up opportunities for people to extend themselves."
Skills and salaries
Demand is high for IT professionals across all major job roles. Employers expect a degree, although not necessarily in IT, while industry certification is valued. Key skills include Java, C++ and C# . Strong personal and communication skills are vital.
Understanding the business and sometimes detailed knowledge of its products can also be important, especially in investment banking.
It can be hard to break into the elite investment banks. Working in insurance, a back-office role or an outsourcing company that contracts with the finance sector can help.
Pay for contractors in the City has hit £50 an hour for the first time since 2001. Top IT jobs on the trading floor can bring in up to £95,000 plus bonuses. Outside the City pay is lower, but still higher than in other sectors.
Finance enjoys growing recruitment, even when the job market is shrinking in other parts of the economy.
The January 2006 issue of the SSL/Computer Weekly Survey of Appointments Data and Trends, out this week, shows an overall fall of 6% in IT recruitment but 6% growth in finance and banking.
Permanent IT professionals in the Square Mile are bringing in an average £50,500 a year. Outside the City, pay does not reach such heights, but rates are still higher than for comparable jobs elsewhere, and benefits packages are attractive.
Case study: making the break into financial services
Chris Warren joined Friends Provident as a software engineer five months ago, after working as a Java developer for an IT consultancy.
She said moving into the finance sector has been challenging. "Compared with other environments there's a lot more business knowledge to acquire, understanding models for insurance and underwriting."
IT staff at Friends Provident are moved around between projects and this is good news, said Warren. "I'll learn different aspects of business knowledge - and I like variety in a job. It's good for me."
Warren said although the salary is less than she earned previously, there was greater stability and a very good pension scheme. She also praised the attention to personal and career development and said she had been given more training opportunities.
Warren said her experience shows IT professionals from outside the finance sector can break in. "A lot of recruiters seem to feel they don't want to recruit people who haven't worked in the sector before. But I think that's a bit harsh. It can be done."