IT management shake-ups sweep finance sector

The predicted rise in technology spending combined with intense consolidation and rationalisation has driven a recent series of reshuffles in IT management across the financial services sector.

Research by analyst firm Celent forecasts growth in technology spending by financial services firms of $357.4bn (£219bn) in 2010 – up 2.9 per cent on 2009, which saw IT spend fall by 2.5 per cent on 2008.

Last week, insurance group Standard Life announced the creation of executive roles covering technology and operations and a transformation function, which will be closely linked to IT as part of the firm’s overall growth strategy.

And credit reporting agency Equifax hired a new chief information officer to run its global IT agenda and introduce customer-oriented products and services.

Elsewhere, uncertainty surrounds the future of IT staff at Turquoise, the share trading platform acquired by the London Stock Exchange (LSE) last month.

The LSE’s multilateral trading facility Baikal and Turquoise will operate separately until the deal’s completion in mid-February, after which there will be a period of integration.

Industry sources speculate that it would only make sense for chief technology officer Yann L’Huillier to remain at the LSE if he is still able to have a say in its IT strategy, but he was unwilling to comment.

In the meantime, L’Huillier remains upbeat about the future and maintains that the integration by the LSE “made sense”.

“I hope that the acquisition will be beneficial in terms of growing the LSE customer base, while enabling Turquoise to get where it was supposed to be a year ago, without the issue of a lack of funding,” he told Computing.

The main strengths of Turquoise’s 30-strong team lie in project management and business analysis, said L’Huillier. The LSE has been resourcing these areas with staff from its Sri Lanka-based IT development facility, who are four times cheaper than their London-based counterparts.

Financial services firms are seeing the end of their “slack” period, where keeping down IT costs was a priority, and will now focus on short-term technology investments and driving down operational costs, said Deloitte consultant Neville Howard.

“There has been a lot of consolidation in the sector, so firms will seek opportunities to rationalise and will always start by looking at the top management layer – after all, who needs two CIOs?,” added Howard.