Fall in number of new IT jobs in investment banks as credit crunch deepens

36% more new IT jobs in financial services than last year
Hedge funds creating more IT jobs than conventional fund managers

The number of new IT jobs being created by investment banks has fallen 18% over the past year, from 16,185 to 13,351 in the last quarter, as institutions rein in IT spending in response to the global credit crisis, reveals research from ReThink Recruitment, the IT staffing company.

Investment banks now account for just 37% of all IT jobs being advertised in the finance sector, compared to 61% last year. Meanwhile, retail banks have more than doubled their share of IT jobs advertised in the finance sector, from 12% to 26%, and hedge funds are now creating more new IT jobs than conventional fund managers.

ReThink Recruitment says that despite the woes in the investment banking sector, there is still strong demand for IT skills in other areas of the financial services industry as organisations increasingly view IT as key to stealing a lead on competitors and continue to put in place new systems in response to compliance and regulatory issues.

Despite the decline in new IT jobs in investment banks, 36% more IT jobs were advertised in financial services Q4 07 than Q4 06.[1]

Jon Butterfield, Managing Director, ReThink Recruitment, comments:

“Investment banks are freezing IT spending in some areas, as they scale back their expansion plans. Growth in demand elsewhere, however, such as compliance and risk management, in response to the credit crunch and the Société Générale scandal, is providing some ballast to the market.”

“Demand for IT skills in the finance sector is still significantly greater now than 12 months ago, so we should take some comfort from that. Retail banks, in particular, are investing heavily in e-banking and bolstering internal systems to combat online fraud. A lot of work is going on to try and speed up the processes needed to achieve compliance with money laundering regulations.”

Jobs Created in Financial Services Sectors from 2006 - 2007

Finance sector	% of new jobs created Q4 06	% of new jobs created Q4 07
[1] SSL/Computer Weekly salary survey
Investment Banking	61% (16,185)	37% (13,351)
Insurance	16% (4,245)	20.7% (7,470)
Retail Banking	12% (3,184)	26% (9,382)
Fund Management	7% (1,857)	8.2% (2,959)
Hedge Funds	6% (1,592)	8.5% (3,067)

The research from ReThink Recruitment shows that hedge funds are now more significant players in the IT jobs market than conventional fund managers, despite some having suffered significant write-downs because of the credit crunch.

In 2006 conventional fund managers were creating twice as many IT jobs as hedge funds. Now for the first time hedge funds (8.5% of job adverts) have overtaken conventional fund managers (8.2% of job adverts) in their demand for IT skills.

Jon Butterfield says:

“Computer-driven quant funds are constantly looking to hone the mathematical models which underpin their investment strategies. Post-credit crunch, this has become a priority issue.

There are now so many hedge funds chasing a diminishing number of market anomalies that IT is becoming a vital weapon in boosting competitive advantage, so despite difficult trading conditions, hedge funds need to invest in IT more than ever.”

The research from ReThink Recruitment also reveals that insurers now account for 20.7% of all new IT jobs in the financial services sector, compared to 16% last year. The insurance industry is under pressure to improve IT systems in preparation for compliance with Solvency II and IFRS Phase II – both of which will require better data management and reporting systems.



ENDS

Note to Editors:


ReThink Recruitment is a leading, independent and privately owned staffing company with offices in London, Manchester, Bristol and Birmingham.

Press enquiries:

Jon Butterfield
Managing Director
ReThink Recruitment
Tel: 020 7367 4444

Paul Arvanitopoulos or Nick Mattison
Mattison Public Relations
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