Big Banks’ Technology Jobs Aren’t What You Expect

If you thought big banks are such big spenders on technology that they’re actually “tech companies” in disguise, you might want to take a long, hard look at some of the recent reports coming out of UBS’s Evidence Lab. In the past few months, UBS has been scrutinizing what banks say about their technology spending. It’s concluded that there’s not a whole lot of visibility about what’s going on there.

As a reminder, big banks make some big claims about how much they spend on technology. Goldman Sachs, for example, said it spent $1 billion on technology last year, up from nearly $900 million the year before. JPMorgan says it spends $10.8 billion. Bank of America spends $10 billion. Wells Fargo spends $9 billion.

So banks are big technology spenders… or are they? UBS’s analysts note that there’s not actually a whole lot of visibility around what banking executives are spending those technology budgets on. Among those institutions surveyed, only Commonwealth Bank Australia actually breaks out how it spends its IT money in any detail. In 2018, CBA said only 40 percent of its A$1.7 billion budget for technology went to application maintenance and development. A huge 25 percent went to software amortization, or writing-off the value of old software that isn’t used anymore. Not so exciting after all.

UBS did some extra research, which breaks out exactly what banks are up to with their technology spending at an industry level. These findings are shown in the chart below. The biggest area of IT spending is security—keeping customers’ data safe; what comes next depends upon where you work.

If you work for a ‘small bank’ with less than $100 billion in assets under management, it’s quite likely you’ll be working on the horror of maintenance or core systems modernization, both of which sound a lot like euphemisms for the horror that is legacy technology.  

But if you work for a bigger one, you’ll have a better chance (although still not a huge chance) of working on the exciting stuff in ‘innovation.’

In other words, if you want an exciting and innovative technology job in banking, go to the big players. There’s cloud computing (witness JPMorgan’s expansion in Seattle) and data engineering, for instance, both of which rank higher up large banks’ list of priorities. By comparison, UBS says smaller institutions stand to struggle to attract “top talent” given that their technology spending seems to be going to less exciting things.

This article originally appeared in eFinancialCareers.

2 Responses to “Big Banks’ Technology Jobs Aren’t What You Expect”

  1. I’ve worked IT over 20 years. Spent years in the Finance and CC Processing industry. Both make money hand over fist and don’t pay their IT people all that well. Some companies pay bonuses based on yearly profit, most don’t anymore. I found getting relevant certs and hopping jobs every few years was the way to get a decent raise.