The Banking industry and Information technology

According to a report from the Global banking industry, currently many banks are under restructured and reducing their workforce all over the world. This is NOT the result of the economic recession or the failure in some banks due to mismanagement but due to the changes in technology. The report cited evidences that some of the largest banks, Citicorp is cutting over 12,000 jobs globally; Bank of America is also reducing about 16,000 jobs; several big banks in Europe, Japan, Singapore, and China are doing the same. However at the same time, these banks are quietly hiring a large number of people, most of them Information Technology (IT) workers.

The report states that the reasons is a majority of customers do not come to banks anymore but prefer to use Automated Teller Machine (ATM) and On-line banking, which are IT applications. As more people are using computers and smart phones for banking transaction, there is a growing need for mobile banking or mobile payments (using mobile phone to pay directly from bank accounts instead of credit cards). Since system architecture and programming languages for mobile payments are different than existing banks’ information systems which use old computing servers or main frames, most banks would have to replace these systems and hiring more college graduates with mobile technology skills.

The report states that demand in banking for newer technologies will create more problems to the current skills shortage in the IT industry. A Wall Street analyst explained: “Banking is the most conservative industry; it does not like to change and prefer to remain as stable as possible. However it cannot stay quiet anymore as technology is changing everything around it. Over the course of time, all banks must change their operation and adopt new technologies. This is happening now.”

The report predicts that job market for bank IT will be strong in next few years as most banks will have to replace their existing IT systems. Every bank will need programmers, system architects, security and data management specialists but this time they have to hire college graduates because only they have the current technology skills such as Java programming, mobile app development; database and data management; risk management; service management; security management etc.

In the past most banks prefer experienced IT workers but this time will be difference because the system architecture and programming language currently used in most banks are too old, some has been used for 20 to 40 years. These systems are different than the programming language that being used in the current processing technology of mobile banking so it must change and this will require different programming language skills. At the same time, new technology will require new project management skills and software development skills that are different from the past. The report suggested that to overhaul the entire obsolete IT systems with new systems, banking industry must turn to college graduates for their skills, and it is good news for students and graduates in Computer Science and Information System Management.

One thing is still being debated is banks may not use Cloud computing for their IT systems due to the security concern so they must build a strong IT group to manage their own IT data systems. The report states that requirements for more IT workers are going to grow quickly since banks must develop sophisticated systems to track and monitor all transaction to prevent frauds and security issues. They must manage all data more efficiently and generate reports quickly to management and that will mean more jobs for IT graduates in the next few years.

Sources

  • Blogs of Prof. John Vu, Carnegie Mellon University
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