With banks getting more dependent on IT, financial services companies are exhibiting a paradox. While the number of jobs in the financial services sector has dropped 16% since 2009, employment in the IT field has shot up 13.9%. Thus, financial services are using third-party or outsourced IT solutions.
Since the 2008 economic slump, IT sector has become more lucrative than financial services, and that is reflected by the analytical report by Nixon Williams. Compared to 2008, when the IT industry had 403,000 jobs, they now have 459,000 jobs this year. The trend is reverse in the Financial Services sector, where the numbers dropped from 1.18m in 2009 to 986,000 today. Due to massive budget cuts by banks, the financial services staffs are being replaced by technology. Use of automation software is substituting manual roles, as is evident by the substantial downsizing by Lloyd and ING. 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.
“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 Martin Brennan, practice manager at Nixon Williams. Recruitment firm Astbury Marsden recently said that banks are facing a considerable rate of attrition, with investment banks having to replace talented technology staff leaving to join start-ups.