'A very bad time for banking technology jobs.' Except at Citi
Peter Wagner knows a thing or two about technology jobs in investment banks. Having worked as an engineer on the trading floor at Morgan Stanley (and Lehman Brothers), he's familiar with the pressures. And having run Affinity North, a New York recruitment firm focused on banking and hedge fund technology jobs for the past decade, he knows who gets hired.
Right now, Wagner says it's almost no one. "It’s been a while since I’ve seen so many outstanding people unable to find their next opportunity," he wrote in his most recent newsletter on the state of the finance technology hiring market. "The current market is bad," Wagner adds. Most banks have got hiring freezes, most FAANG firms aren't hiring, hedge fund hiring is slowing. If you want a new finance tech job now, he says you probably need to try fintech firms, vendors, or accept the sort of corporate technology job miles away from the trading floor that is less imbued with prestige.
"Lower your expectations," Wagner commands. The finance technology hiring market may not come back until....2024, he predicts.
What about the wild hiring at Citi?
While this all sounds excruciating for engineers hoping for new jobs, one bank seems to have been bucking the trend: Citigroup.
When it announced its second quarter results last week, Citi said that in the year to June 2023, it added no fewer than 7,000 technology staff as part of its transformation program. In the process, it increased technology spending by 13%.
What are all these extra Citi technology people doing? Legacy systems are being retired and fragmented systems are being consolidated, but mostly Citi is all about automation. Last week's report said it's "reduced manual touchpoints" by 90% in its equities middle office and by 98% in the prime finance middle office. It's implemented a new control platform that's reduced errors by 85%.
Long term, Citi CFO Mark Mason said the higher spending on technology should "yield benefits" in the "cost structure" and "bend the curve."
For the moment, though, the increased technology spending is presumably contributing to the dramatic decline in profits at Citi's institutional clients group, where net income was down 44% year-on-year in the three months to June. If Citi doesn't have a tech hiring freeze yet, it too may have one soon.
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