What was hot and what was not in the financial IT industry last year? Here’s our considered opinion…

2007 was a good year for…

Commodities-related technology
Commodities have been, quite literally, the rock amid the market turmoil. It’s no surprise, therefore, that those investment banks with a smaller market share have attempted to bite into the dominance of the top two – Goldman Sachs and Morgan Stanley.

At a senior level, Deutsche Bank, Merrill Lynch, Credit Suisse, JPMorgan, Barclays Capital, Fortis, Lehman Brothers, BNP Paribas and Royal Bank of Scotland have been aggressively pursuing trading talent. And this has fed into commensurate demand for technologists to work on commodities trading systems.

Paul Thoma, managing director of investment banking IT search firm Garthorne Associates, says: “There’s been a lot of investment in technology, and also increased levels of poaching in the commodities tech teams this year, as smaller players look to move up a division.”

Foreign exchange techies
According to the Bank for International Settlements, a third of global currency trades now go through London. Technology is an essential part of FX – a market which is estimated to have grown by 71% over three years – as investment banks drive towards straight-through processing.

Little surprise, therefore, that FX tech skills are hot – recruiters say a dearth of technologists with experience of vendor packages like Murex, Calypso and Summit has driven the contractor rate up to £700 a day this year.

Insurance
Exciting isn’t a word often associated with the insurance industry, but when it comes to IT investment, the industry has been – dare we say it – dynamic.

The need to upgrade clunky legacy systems, combined with compliance with regulations such as Basel II and an increased customer focus on internet transactions, has led to a surge in demand for change managers.

“This is the first time I’ve seen a war for talent,” says Simon Walker, managing director of IT recruitment firm Project Partners. “Investment banks have been in this space for years, and now suddenly insurance firms are competing.”

And 2007 was a bad year for…

MiFID jobs
Yes, believe it or not, the verdict seems to be that the Markets in Financial Instruments Directive (MiFID) didn’t measure up to expectations on the jobs front. UK banks might have spent an average of £1bn getting up to speed with MiFID and some still need to invest. But recruiters claim it was a bit of a damp squib.

“We expected MiFID to be a big thing in terms of number of hires this year, but it never really happened,” says Walker.

IT bonuses
Although average bonus payouts at Goldman Sachs and Morgan Stanley were up 6% and Lehman’s average total comp was up 10%, IT generally gets the short end of the stick when it comes to bonuses.

“The people we are speaking to are not expecting bonuses to be very good,” says Peter Barker, manager of the IT banking division at recruiters Huxley Associates. “Even on the IT side of things people were brought in or prevented from leaving by guaranteed bonuses, and while these may be as good as previous years', others aren’t expecting much at all. We’re anticipating a lot of churn next year, because people who didn’t get the bonuses they wanted will be looking to move on.”

Wannabes
Time was when the banking sector would consider technical staff with little or no financial experience, such was the dearth of talent in the industry. This is changing.

“This year banks have been more demanding in getting people with exposure to specific financial products,” says Walker. “They need to have people who can communicate with the business and have an understanding of the products they are dealing with.”

eFinancialCareers' editorial team is now taking a Christmas break (but will be intermittently available to answer your questions and moderate your comments). We wish all our readers a very, very Merry Christmas!