What is IT in Banking & Finance?

IT professionals in banking and finance are in high demand in developing, programming and maintaining existing and new IT systems to increase the profitability and efficiency of institutions.

However, any activity that is purely IT (eg. programming) is now usually outsourced to India. If you only have pure technical skills, you may find that you are competing with outsourced workers in another country, and this will limit your prospects.

The IT professionals that are in high demand in the UK and USA are those that understand the whole financial sector, and the needs of those working in the sector. These professionals can act as the middle-man between the financial professionals and the real specialist ‘techies’. If you want to be in demand, make sure that you have a holistic understanding of the whole banking and finance sector (enrol on the City Professional Programme to acquire the essential knowledge in the fastest possible way). You need to be able to translate “I want something that does x and y” into instructions that a team of programmers can implement.

IT is essential in front, middle and back office.

Front office IT may involve anything from programming fund manager black box systems to assisting quant traders and creating systems to price complex derivatives.

Middle office IT may involve anything from developing risk management programmes for traders to developing payroll systems for the finance team or Human Resources.

Back office IT may involve anything from supporting the internal computer systems on a day to day basis to developing settlements systems.

IT Development & Programming

Developing and maintaining front office trading systems in a bank is a little like repairing a car, with the engine still running. There can be no downtime during the trading day.

This added pressure is reflected both in salary, as compared to middle and back office developers, and the bonus that can be expected.

The speed and sophistication of a bank’s trading systems are considered imperative for giving traders a competitive edge. Multiple market data feeds are fed into the trading systems and become part of the real-time system, enabling a swift reaction to news. The maintenance of both trading and market data systems are mission critical to an investment bank’s operations and performance.

Legacy front office systems tend to be written in C++, with the majority of newer trading applications being written in the newer languages of Java and C#. While experienced Java and C# programmers will have come from a background of another language, developers tend to specialise in one of these programming languages and this, to a certain extent, dictates which banks they can work for.

However, many current senior developer roles require a working knowledge of more than one development language.
The business area the developer specialises in does not have a huge impact on salary – developers for equities, exchange-traded derivatives and fixed income systems can command much the same salary as the other. There is a slight edge for those with specialist knowledge in exotics mainly because there is less automation of over-the-counter and non-vanilla products.

Program trading, or ‘portfolio trading,’ refers to a number of trades triggered and implemented automatically, once parameters have been set by IT teams.

Program trading is being bundled together with other alternative trading methods, including direct market access (providing systems that allow fund managers to send orders directly to execution without the intervention of a trader), and algorithmic trading (trading which uses algorithms programmed on computers to process orders far faster than any human being).

Banks hire very quant-based traders who can analyze a huge number of trades and build algorithms that can trade them as well as any human being.

The lines between traders and technical support staff are blurring because traders are developing expertise in technology; that means technologists need to be experts in both computers and finance.

‘We won’t look at technologists that don’t have a firm understanding of the particular business area. We get developers who have created their own trading strategy and back-tested it for three years.’

There are a million Java programmers in outsource facilities in India, for example, who can bang out Java code, but they won’t have the particular domain expertise that firms want. Banks need IT finance professionals who have a good understanding of particular areas such as emerging markets derivatives and Java so you are able to program front office systems around your expertise.

Banks are competing hard for such highly qualified IT staff, and they are ready to pay.

‘They will want someone on their Java development team, but they want someone who in addition to Java also knows credit derivatives or interest rate derivatives,’ says Sharp.

The IT hot spot is derivatives, especially credit derivatives. ‘These are jobs that look like the business, and they pay like the business,’ he says. ‘In these front office roles, they work directly with the trading desks and the analysts and they take the quantitative problems and produce technological solutions in trading systems. It requires hard-core, work-on-the-fly developers who know how to translate business into technology.’

IT Maintenance & Support

The banks are placing a lot of emphasis on re-engineering their business processes to make them more efficient, with a concentration on straight-through processing. You could be supporting all levels of staff in all departments from Human Resources to Proprietary trading

Technology skills in demand includ:

• Development languages such as C++, VC++, Java, VB, Tibco, MQ Series and Clearcase, as well as newer technologies such as C# and .net.
  RDBMS developers and DBA’s in Sybase, Oracle and SQL Server
• System administration and infrastructure support skills in Unix, Linux and Windows

How do I get a graduate scheme / internship / entry level job or career in Banking & Finance IT?

Obtaining a graduate scheme, internship or entry level role in Banking & Finance ITcan be very challenging and competitive – though very achievable by getting your application, CV, interview and general approach right. You can guarantee that ninety percent of applicants for Banking & Finance IT roles will not know how to apply, so getting your application in the top ten percent makes things a lot more achievable.

Approaching the company in the right way will make all the difference. Combining the right approach with a strong interview (and in some cases assessment centre) writ a strong focused tailored CV will go a long way. Make sure you have gone through the free videos on this sight by entering your name and email address in the top right of this screen underneath the video. Once you have filled this in you will have instant access to everything you need to secure your career in Banking & Finance IT.

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