The appeal of third-party providers will cause many banking companies to reduce IT staff during the near future, but that will result in an employment increase for financial tech vendors, including those that provide recruitment software.
A recent report from Celent, a consultancy firm, predicts that European banks will spend $18.5 billion on IT staff this year, a decrease from $18.9 billion during 2009. That number is expected to decline by another 3 percent during 2011 and and an additional 6 percent during 2012.
“It’s more expensive and less efficient to undertake development in-house rather than work with a third-party,” Axel Pierron, senior vice president of Celent, said. “It’s clear that IT budgets are still in a very uncertain phase.
“In Europe, we’re not expecting a big jump in spend on new projects, but if markets remain stable we’ll see an increase,” he continues. “However, this will mostly benefit third-party providers rather than cause a huge recruitment spree in the industry.”
Fortunately, however, this would require technology vendors to hire more workers to keep up with increased business, which would be a welcome turnaround, as financial services firms have experienced a lull in business. For instance, software group Misys saw sales of its banking software decrease by 11 percent during the last half of 2009.
Other positives are on the rise:
- Sungard Financial Systems is recruiting new workers for its London office.
- Trading Technologies has expanded its relationship with Mizuho Securities and is currently hiring.
- SS&C Technologies recently acquired Tradeware Group and added 60 workers in the United Kingdom and United States.
- Sophis is hiring front office consultants at its London office.
Banks will not completely cease hiring altogether, therefore maintaining the need for recruitment software providers. Celent predicts that banks will hire workers as they roll out technology projects around cash management, trade finance, foreign exchange and liquidity management.