City hiring activity in October increased 46 percent on the same month last year says Astbury Marsden, the leading recruitment firm. According to Astbury Marsden, 3,400 jobs were created in the City in October, significantly more than the 2,330 jobs created in October last year, and down only slightly from the 3,470 jobs created in September 2014.

Astbury Marsden explains that robust hiring activity in the City is being driven by renewed investment by banks in the “digital agenda” to deliver cost savings, improved performance and help meet regulatory targets. The accelerated shift from retail bank branches to mobile banking is the most visible sign of efficiencies that are being delivered by IT investment and a similar scale of operational improvements are also being sought in investment banking. Areas of IT investment in the City include: integration of collateral management across business units in order to cut funding and regulatory capital costs; continued digitalisation of business processes to strip out costs improved real-time assessment of the risk profile of assets both for risk management and regulatory reporting purposes

Adam Jackson, Director at Astbury Marsden, comments: “There has been a sea change in how firms view investment in IT over the last year in the City. Investment in IT is no longer being seen as a cost but as a key to unlocking better long term profitability for the sector. From investment banking through to the insurance sector, investment in IT seems to be back in vogue. This next wave in the digitisation of banking sector processes is already having a profound impact on hiring activity at the large investment banks 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.”

Astbury Marsden says that untangling their investment and retail banking units may require the retail banking unit to develop a new set of administrative and support functions to prove that the retail unit could survive the insolvency of an investment banking unit with which they share support functions. Astbury Marsden adds that in some instances investment banks have to hire to replace talented technology staff that are leaving the banks to join smaller Fintech companies. As well as offering potentially lucrative stock options these Fintech companies offer the opportunity to develop new programmes and technologies from the ground-up.

“We’re already seeing the smaller Fintech companies snapping up some of the best technology staff from the investment banks. Banks do not just have to compete with their peers for these staff but also have to find a way to make the roles they have to offer more attractive than those opportunities being created by this new breed of start-ups.”