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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.
Source: Associated Press