The number of jobs in the financial services sector has declined 16% since 2009 while the number of staff employed by IT firms has increased 13.9%, partly because banks are using more IT.
Financial services companies are using more third-party IT products and services as well as outsourced IT, which has boosted the number of workers in the IT sector, while the workforce in finance has fallen.
The IT and finance sectors are often in competition for IT talent and, since the credit crunch triggered the financial crisis in 2008, the financial services sector has become less attractive to work for and more willing to use third parties for IT.
According to an analysis by Nixon Williams, in 2009 there were 403,000 jobs in the IT sector compared to 459,000 this year. In comparison, financial services jobs have fallen from 1.18m in 2009 to 986,000 today.
With big IT spenders such as banks cutting costs, thousands of staff are being cut and replaced by technology. For example, Lloyds bank is cutting 9,000 staff as part of its digital strategy, which will see the use of automation software to replace previously manual roles. Dutch bank ING has a similar project that will result in 1,700 staff losing their jobs.
The banking sector traditionally had huge in-house IT teams, but costs, regulations and the pace of technology evolution has changed that. There is a real appetite for using third parties across the finance sector.
Sumeet Chabria, CIO of HSBC Global Banking and Markets, recently told Computer Weekly recently that he is open to working with third parties for IT innovation. He said different ways to develop and implement non-core systems can be explored, whether through third-party suppliers, joint ventures with other institutions or working with smaller, innovative startup firms.
Meanwhile, Deutsche Bank recently set up a joint-innovation venture with IBM, Microsoft and Indian IT services firm HCL Technologies to improve its digital credentials. App stores for banks is another trend aimed at encouraging third parties to develop for banks.
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All these trends mean less staff in the financial services and more in the sectors that support it, such as IT.
Martin Brennan, practice manager at Nixon Williams, said the UK IT sector has seen its strongest year of growth since the recession.
“The need to rebalance the economy away from financial services became apparent during the financial crisis, and these latest figures show that the UK tech sector is rising to the challenge," said Brennan.
"Talent that might have previously gravitated towards financial services is now just as likely to be looking for equity in a tech startup – something which has not been seen on this scale since the dot com boom. This is particularly true in London, where a lot of talent has poured into tech startups that might otherwise have found a home in traditionally high-paying banking sector jobs.”
Recruitment company Astbury Marsden recently said banks face competition for the best staff, with investment banks having to replace talented technology staff leaving to join startups.
“Banks do not just have to compete with their peers for these staff – they also have to find a way to make the roles they have more attractive to compete with the opportunities created by this new breed of startups.”
One investment bank IT professional told Computer Weekly this is a growing trend.
“A lot of my friends and colleagues have left the banking industry because it is not fun any more,” he said.