Banks hire staff to run digital services and meet new rules

Retail banking is in the throes of a digital revolution, with business transacted through branches falling sharply

City hiring has surged by 46 per cent as banks pour money into the digital revolution, it has been claimed.

The headhunter Astbury Martin says 3,400 jobs were created in the City in October, nearly half again as much as the 2,330 jobs created in October last year, although the figure is down slightly on the 3,470 jobs created in September 2014.

The firm says IT professionals are in particularly strong across the banking industry, having detected what it calls a “sea change” in the way technology is viewed.

Adam Jackson, director, said spending money on IT is no longer being seen as a cost but instead as “a key to unlocking better long-term profitability for the sector”.

The figures have to be viewed with caution – they are based on extrapolating from the firm’s own business, together with analysis of advertised vacancies. They also take no account of lay-offs. However, they chime with what a number of banks have said about their commitment to IT and willingness to back this by hiring.

Retail banking is in the throes of a digital revolution, with business transacted through branches falling sharply at the same time as mobile phone-based banking booms. The “big four” of HSBC, Lloyds, Barclays and RBS have been closing branches, and giving those that remain a hi-tech makeover, while investing in a range of digital services.

Investment banks, meanwhile, have sought to beef up their IT functions, with the aim of reducing costs by digitising their processes and using technology to assist with real-time risk assessment.

Banks have also been taking on thousands of risk and compliance staff to cope with new regulatory demands, in part driven by a string of ugly scandals.

Mr Jackson said: “This next wave in the digitisation of banking sector processes is having a profound impact on hiring activity and this is set to continue well into 2015 and beyond.

“Regulatory deadlines also remain a major driver for IT hiring. Regulatory changes have forced investment banks to undergo a wholesale restructuring which will not be completed for several years. Major challenges include the ring-fencing of investment banking from retail banking, where final delivery is not until 2019, but which is already demanding substantial resources just for the planning stage.”

One of the difficulties faced by banks has been in retaining staff amid increasing poaching by small, specialist, IT companies.