It’s not cool to be a techie on Wall Street. Or at least not as cool as it used to be.
That was the indictment handed out during the CIO roundtable at TabbFORUM’s MarketTech 2012 event on June 5. There were gloomy tales from both the roundtable and from a headhunter in the audience of the inability to attract top tech talent despite the economic environment.
Wall Street has entered the slow lane of cool development and the smart talent (young and old) is headed for the faster-paced lanes of Google and Amazon. The average age of the database administrator is increasing every year as legacy systems require legacy knowledge of now outdated languages and processes. These systems are hard to replace as they are so central to the working of the organization and few organizations currently have the appetite to tackle the big iron head on. Meanwhile, that new iPad application from your broker that you downloaded this morning was probably coded by an intern who’s still learning to drive.
For a company in financial services, the inability to innovate and turn efficiently on a dime is shortening the line of talent at the front door. IPads, smartphones, Facebook and Wikipedia point to a world of users who are collaborative, international, mobile, tech-savvy and downright impatient. The way that organizations manage their intelligence, projects and resources needs to reflect this environment. No company wants a reputation as a sluggish place to work; the result is it becomes more expensive to attract and retain great people, losing out to the funkier working environments of Silicon Valley. And as Silicon Valley companies open up on the East Coast, the threat to Wall Street is no longer at arm’s length.
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7 Comments to "Wall Street Is Losing Its Cool":
Anonymous
11 June 2012
It’s the ISVs that are losing their cool. Desperate for cash, from a client base with none, rather than empathy they are squeezing their clients. It’s ridiculous and bad for the markets that we are having to disconnect from venues because we can’t afford the gateway fees, which are basically extortionate. Good news seems to be, increasingly we can dis-intermediate our EMS by using gateway bridges from Fixnetix, ORC, UL etc. Also it looks like finally Bloomberg SIOMS is putting some real pressure on Fidessa hosted clients held to ransom over connections. SIOMS has come of age, offers a commensurate product at a fraction of the price and don’t rape you on connectivity. Commerzbank I’m told has already made the switch and many other are looking to move. Perhaps its time for Fidessa and their ilk to embrace fragmentation as much as Steve Grob talks about it ?
ltabb
11 June 2012
The problem there is no free lunch.
The reason why Bloomberg can afford to give free trading connectivity is that they have what everyone needs (or what everyone thinks they need), and they are very firm on their pricing. Just try getting Bloomberg to cut you a deal on terminals, I think it is way easier for me to naturally grow hair. Now I am not dissing BBG - they have a great product with a killer business model that any of us would die for. And trading is one of their killer aps -- the more folk’s trade on Bloomberg, the more terminals you need, and the more you need to buy. It’s like crack on steroids.
The problem with the OMS biz is that it’s been really competitive with the only thing more competitive has been the brokerage business that on reflection stupidly started paying for order flow through an OMSs connection.
At the end of the day, it costs money to build software, money to connect, money to innovate, and there just isn’t enough money now to make the financial markets brokerage community to go around.
So what do we need to do? Change the way we think about providing services, using services and paying for services. That was another theme of the conference – infrastructure and cloud. How do we process for less? How do we connect for less? And how do we manage with less?
And the folks that figure that one out will be the next Bloomberg – that is unless Bloomberg figures it out first, which it seems like its well on the way toward doing.
Comments (303)
riati
12 June 2012
Briliant, Miranda! This is a significant issue to the continued growth of our business that I have not seen sufficiently addressed until last week's Market Tech 2012 event and now here. I wrote about this on these TF pages this past November (http://www.tabbforum.com/opinions/where%27s-the-innovation). Another point made in the event was how 73% of tech spend goes to maintenance, rather than new development which work together to further deter the best and brightest from coming to our industry.
Comments (51)
lberke
12 June 2012
One thing that strikes me about this trend toward Silicon Valley & away from Wall Street is this idea of collaboration, sharing, open code, let alone open shirt collars. I'm not sure there's much in the way of community effort in the DNA of the capital markets. Ours has been a business of Super Stars, Super Winners & Super Losers. Bonuses aren't paid to teams, they're paid to individuals who have demonstrated absolute singularity of talent and of purpose. MD titles aren't given to team players, they're given to those who have demonstrated they can kill to eat, and thus eat well. Young professionals entering the job markets today are used to living and communicating, even dating, in groups. So can Wall Street develop a culture to attract social networkers? Perhaps. Perhaps it will take a generation of time to see a changing of the guard, a guard that held reign over an industry that lost its way. It may very well take that much time to see a rebirth of culture and opportunity that can capture the hearts and the imaginations of the next generation of innovators. .....Hope not.
Comments (129)
eville
12 June 2012
FYI, this commentary was discussed at length in today's CIO Report on CIO Journal.com at the WSJ. http://blogs.wsj.com/cio/2012/06/12/tech-talent-slipping-through-wall-street%e2%80%99s-fingers/.
elucidate
13 June 2012
Larry, there is certainly no reason why brokers should ever have started paying OMS / buyside EMS vendors for connectivity. These charges go up as high as $1,000 per month per client. This was just a try on that seemed to work out! It is totally disproportionate to the cost of support and most brokers have already paid that vendor to build out their algo suite. Equally, there is no justification for sellside EMS vendors to be charging anything like they are for exchange connectivity - the cost of building these using fix is negligible, a few days work maximum and there are massive economies of scale in supporting them - there should be a $1,000 per month per client for a job lot covering all markets. The larger vendors should be obligated to connect to all venues by the competition authorities; it is not for them to define market structure. Lets not forget the ISVs are in deep trouble if exchanges and brokers start refusing to work with them, we just need someone to open the floodgates - why dont the majors just call eachother up and agree this. Broker are now at a point where they are firing their biggest ticket sales people and cutting off major buysides; this has to fall back to the ISVs and the telcos. Where possible orders can be sent by over VPN where there is no latency sensitivity e.g. darkpool or auction placing strategies. In short we need to strip cost out of electronic equities, margins over 20% are no longer acceptable.
louislovas
25 June 2012
Another concern at the forefront of the (finance) tech talent is a legal one. While the backoffice maybe boring, mundane development work. The front office is still hot, algo's are the lifeblood of any trading firm - they life and die by their profitability. Their creation is a mix of skills from math geniuses to java/C++ code slingers. Nonetheless, the lure of a big (bigger) salary can overpowering leading to "breach of contract" or in other words code-theft. There has been a rash of reported cases (and who knows how many unreported) in the past year.
http://www.advancedtrading.com/algorithms/240002167
Comments (29)