The Right Stuff: A Good IT Manager Is Hard to FindCIOs are struggling to keep their departments staffed with talented technologists who understand the business. Finding senior-level workers with the right stuff will continue to prove difficult.
Why It's Important: IT skills are hard to find, and technology managers are prime targets for intra-industry poaching. The securities industry continues to move toward more electronic trading, spurred by regulation, competitive forces and the search for alpha. But meeting these challenges still requires people. Research indicates declining graduation rates among U.S. students majoring in computer sciences, and the cost of identifying, attracting and retaining individuals capable of impacting the bottom line can be exorbitant. "The market for top-tier talent is always tight," notes Kristin Wait, a consultant with Spencer Stuart. "The players with proven track records in key functional areas will always have multiple opportunities in front of them, thus bidding up the market price for these true specialists."
Where the Industry Is Now: While whispers circulate about firms buttoning up their budgets in preparation for an economic recession, hiring trends illustrate the strength of the national securities industry. According to U.S. Department of Labor statistics, the securities industry entered the fourth quarter of 2006 with the highest number of jobs since February 2002. The industry has recovered more than half of the jobs lost between the March 2001 peak and the October 2003 trough, and is trending toward growth in 2007.
Focus in 2007: CIOs are projecting strong growth in hiring through 2007. According to CIO survey results from Robert Half Technology, 17 percent of CIOs in the financial services industry intend to increase IT staffing. New emphasis will be placed on injecting the IT organization with some business blood, as a strong business acumen and proven bottom-line results will become increasingly important next to pure technology skills for management positions.
Industry Leaders: The talent pool is shrinking, and demand for technology managers is soaring as a result of regulatory pressure, emerging technologies and new service offerings. Employers are losing control of the market. Attracting talented managers to an IT organization necessitates that the firm be as attractive to the prospect as the prospect is to the firm. The winners will be those firms that avoid operating as an IT factory, and instead create an environment in which IT managers are encouraged to focus on results and bottom-line implications of IT projects. Worthy candidates can quickly assess the value of technology to a firm; if it is not a critical function that demands the attention of the C-suite, priorities will be shifted elsewhere.
Further, emphasizing alternative sources of talent, such as user communities, will allow firms to identify top talent. For example, several large investment banks and brokerages, including UBS, have mined TopCoder -- an online software development competition administrator and community -- for talent.
Technology Providers: Even the largest financial institutions in the world turn to executive recruiters when in need. Some recruiters with a presence in the securities industry include Korn/Ferry International, Spencer Stuart and Russell Reynolds Associates.
The Price Tag: Top talent costs top dollar, and while salaries are rising, benefit packages featuring unique perks -- including employee development programs, tuition reimbursement and flexible schedules -- can be a major selling point. According to research from Robert Half Technology, the positions that will see the highest salary increases in 2007 include application developers (5.1 percent increase), Web developers (4.2 percent) and data warehouse managers (4.2 percent).
10 Critical Business Technology Issues for The Street
In 2007, firms will face the daunting full rollout of Reg NMS in the U.S. and the likely beginning of MiFID implementation in Europe while they continue to struggle with data privacy, OTC derivatives, a shortage of talent and the potential of Web 2.0, among other challenges. more...
Data Privacy: Financial Institutions Try to Keep Data Breaches Down in 2007
Several big-name data breaches made 2006 an ugly year for the securities industry, and security and privacy professionals are hoping to bring the problem to a halt this year.
In the Search of Liquidity: The Time Is Now
Now that Reg NMS is finally here, are firms ready to access 30 or more trading venues in their search for liquidity? After a year of investment in technology, firms need to demonstrate that their systems are up to the challenge.
The Buy Side Jumps on Board the Push to Automate OTC Derivatives
Now that traditional buy-side firms and hedge funds are increasingly investing in credit derivatives, the fastest-growing product in the OTC derivatives space, the industry is focusing on automating post-trade processes to reduce operational risk.
Firms Ready to Dive Into China's Financial Markets
The opening of the huge Chinese financial services sector to foreign-based institutions presents a gamut of opportunities -- whether in retail and corporate banking, investment banking or asset management -- for North American and European firms.
The Right Stuff: A Good IT Manager Is Hard to Find
It's going to be a good year to find a new job, as the shrinking talent pool has created a strong job market for IT workers with strong business acumen.
NYSE Requests a Four-Week Extension of the Reg NMS Deadline
Although it has been beaten to death by industry analysts and press, the importance of the changes to the U.S. securities industry spurred by Reg NMS cannot be overstated. The industry anxiously awaits full implementation of the regulation in 2007.
A Market Turned Upside Down
The European Union's Markets in Financial Instruments Directive (MiFID) is scheduled to go into effect in November 2007. Even U.S.-based firms will need to have a thorough strategic plan for compliance in order to stay competitive in the global markets.
Wealth Managers Turn to Unified Managed Accounts to Better Serve Wealthy Clients
Unified managed accounts and unified managed households are part of a growing trend to electronically aggregate a client's holdings in as close to real time as possible. The goal of such cross-product, cross-institution and cross-individual accounts is superior portfolio management, including tax optimization and risk mitigation.
Web 2.0 Enriches Applications and Services, Making Them More Compelling to Users
One of the hottest buzzwords of late, Web 2.0 refers to Rich Internet Applications (RIAs) that use the Internet as a platform to create interactive user interfaces that resemble PC-based applications. Typically, RIAs emphasize online collaboration among users.
Surging Electronic Trading Volumes and Reg NMS Require Financial Firms to Enhance Underlying Technology Infrastructures
Electronic trading is exploding and firms are rapidly expanding technology infrastructure to handle the increases in trade volumes and associated market data and messaging.
SMS Messaging and Asynchronous Data/Voice Capabilities Will Shape 2007 Wireless Market
SMS and text messaging will take center stage for financial organizations that support wireless access for clients, reports Joseph Ferra, chief wireless officer at Boston-based Fidelity Investments. Those trends, combined with the introduction of asynchronous data and voice capabilities on phones, will drive increased wireless usage for financial transactions.
Putnam's 64-bit Architecture and Outsourcing Strategy Allows IT to Focus on Core Competencies
Boston-based Putnam Investments has leverage outsourcing of certain processes so business leaders and technology professionals can focus on projects that provide specific value to the business, according to Philippe Bibi, Putnam's CTO.
Web 2.0 and Data Privacy Will Define Financial Services in 2007, Says Steve Rapp, SVP & CIO, Nicholas Applegate.
The move to further protect client data and the maturation of Web 2.0 related businesses are two topics that will define financial services in 2007, according to Steve Rapp, senior vice president and CTO at San Diego-based Nicholas Applegate Capital Management.
Mellon Focused on Bank of New York Merger and new Private Wealth Management Platform
Mellon Private Wealth Management looking to take advantage of the Bank of New York's international reach all while launching a new platform that will transform the way wealth managers interact with ultra-high net worth clients' other advisors, according to Tim Tully, SVP & COO, Mellon Private Wealth Management.
Cross-Asset Algorithmic Trading Goes Mainstream, While Software As a Service Gains Traction
More buy-side firms will adopt cross-asset class algorithmic trading in 2007, while software as a service will again be en vogue, as the comfort level with the technology and Web 2.0 functionality help adoption rates, says David Dart, a former managing director and CIO Americas with a large German bank (as of Dec. 31, 2006).