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Technologists think traders are arrogant. Traders think technologists are slow. A former Deutsche Bank MD explains why this is.

Why technologists in banks think traders are arrogant and overpaid

As you will know if you have worked in an investment bank, there is often an inherent struggle between those who work on the trading floor and those who work in technology. It is amply illustrated by an event from my not too distant past.

One night after markets had closed. I was in a pub with a technologist. He was someone whom my colleagues in IT wanted to hire from a rival bank. My purpose was to try to persuade him to jump ship with the aid of my natural charm and a few beers. The IT boys felt the fact that - prior to being a trader - I had built computer systems might be helpful.

After an hour, my smile had solidified into a rictus grin. The technologist had a litany of complaints about the traders at his current shop.

He said they were vague with their requests; they didn’t understand what was and was not possible; they were always changing their minds; they were impatient, but, conversely, they weren’t interested in any of the details until the project was delivered, at which time they would bitch and moan that the system wasn’t what they wanted.

Above all, he said the traders were arrogant and overpaid. At that, my grin tightened one further notch.

I did my best to persuade him that, in my department at least, we had mostly solved these problems. As it turns out, either my charm or the beer was persuasive because he did make the move and, as I recall, had a happy and successful career.

But the issues he describes are widespread within banking. They arise naturally from the different natures of the traders’ and technologists’ jobs and, unless forcefully addressed, can cause a breakdown in a relationship that is increasingly vital for any bank’s success.

For one thing, traders and technologists very often belong to completely separate departments which ultimately only come together at board level.

There are some good rationales for this structure: with computer systems handling gigantic money flows it is considered safer not to have traders actually supervising tech folks or vice versa – think about the crazy reporting structure that allowed Nick Lesson to hide his losses and bring down Barings.

Having technologists managed within a central IT department also allows best practice to be transmitted (by osmosis as it were) throughout the whole organisation: a practice that – in theory – should lead to efficiencies.

But what it does mean is that many tech guys, on a temporary assignment to build systems for one area, are often not product specialists: they either need to be educated or have specifications that are completely precise. Problems are baked-in from the start.

The two groups also have slightly different day-by-day priorities. IT guys want to take the time create computer systems that are bulletproof since the onus is on IT to fix things should they fall over – all through the night or at weekends if necessary.

Traders, on the other hand, used to the minute-by-minute pressures of the markets, often want things right now and are impatient with delays. This culture clash can often cause ‘difficulties’.

I recall one meeting, years ago, where a tech guy was given responsibility for taking over a series of spreadsheets that an enterprising trader had built to run a new and fairly complex product. When the techie found out that the sheets were only held on the hard drive of the computer under the trader’s desk, he went pale (actually, paler) and let out a small, involuntary cry of panic like a nervous passenger in a jet hit by turbulence.

Taken to extremes, these cultural differences can lead to the dissatisfaction expressed so forcefully by my companion in the pub: airy orders from the business to ‘go away and build something’; subsequent sniping and complaining about delays (‘how long could it possibly take?’ etc.); then a full scale war when the – unsatisfactory - project is eventually delivered.

But there is a way around this, and that way is teamwork and constant communication.

Successful projects have the IT guys involved right from the beginning in what the business (the traders and salespeople) are planning for their systems and why. They allow them to express their views and to own the strategy and not just be low-grade ancillary workers.

Successful projects also create detailed and precise definitions of every aspect of what is required. Don’t just leave this to the IT guys to figure out. This bit’s a pain, but it is crucial.

The parties involved meet constantly throughout the process to make sure the project is on track and to iron out any issues as and when they arise.

I once had a visit from a senior chap from another part of the bank who had been sent to ask how we handled technology in the FX department: we had a reputation of being good at this stuff; his department sucked. ‘What do you mean by constant communication?’ he asked, ‘Quarterly?’

I took him out onto the trading floor and pointed out numerous technologists and traders sitting, side-by-side, in intermingled teams. ‘Unless they all have Asperger’s,’ I said (which, knowing IT people and traders, is not a zero probability, I admit), ‘I’d guess it’s every few minutes.’ My visitor’s jaw dropped.

Ultimately, it boils down to this: if traders and salespeople treat their IT colleagues as subservient menials or, at best, as caddies (with traders in the glorious role of Tiger Woods), disaster beckons.

On the other hand, if senior managers are wholly engaged, and if technologists are treated with respect as full, albeit specialised, members of the wider team, success may follow.

In a world where banks are little more than people and computers and where their biggest long-term challenge may well come from technology firms, this might not just be ‘nice to have’ but a recipe for survival.

Kevin Rodgers started his career as a trader in 1990 with Merrill Lynch in London before joining another American bank, Bankers Trust. From there he went on to work as a managing director of Deutsche Bank for 15 years, latterly as global head of foreign exchange. His book, “Why Aren’t They Shouting?: A Banker’s Tale of Change, Computers and Perpetual Crisis” was published by Penguin Random House in July 2016.

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  • Cj
    Cj Mk
    22 August 2022

    Well, I am working on being a trader, a techie and a salesperson. I wonder how it will all turnout?

  • SS
    SSSS
    30 August 2018

    What Hrdniltr said might true for discretionary traders but not for algo trader or central risk book traders. Take central risk book trader as an example. Most bank’s central risk book doesn’t make money and won’t make money. If they made money then they are likely prop trading. That means strategies and analytics created by traders and quants worth nothing. Traders in central risk book are not taking any risk so they shouldn’t get paid well. Traders and quants often took most of credit because they get more exposure in front of management. Shame on central risk book traders! It’s UNFAIR!!! Tech is the single most important thing in central risk book! Tech deserve more recognition! Central risk book cannot survive without tech!

  • Hr
    Hrdnitlr
    29 August 2018

    Good article laying out the broad outlines.

    As someone who started out in IT (10+ yrs), then joined the line business (now 10+yrs), one thing that can't be overstated is the huge difference in personal risk between the functions. If I mess up, FINRA or the Fed can come knocking on my door, and I can be held personally (even criminally) liable.

    As an IT person, I never had that degree of personal risk - only reputational risk.

    So now while I always have huge respect for the guys who *service* my technology, the guys who develop it are much harder to trust. They just don't have the degree of accountability - except politically, and admittedly IT mgt structures within an I-bank are filled with vipers - that those of us who deal with live dollars and the institutional investing public do.

    It's easy to look at a trader's job and think it's just button-pushing and schmoozing. But I go home on a nightly basis mindful that any bad call I make on a given day might blow up a customer. And my accountability for that can stretch years, can be second-guessed long after the fact. I know 3 people personally, one I worked with daily, who have served Federal jail time due to bad decisions made under enormous pressure.

    In IT I was entirely insulated from that. The worst possible consequence was job loss. Just entirely different playing fields, and I think it's the developers who have to make a bigger empathy shift in their mindsets, ultimately.

    P.S. As a contrast, I also worked briefly in healthcare IT, and those guys really get it regarding how much is at stake in terms of being out-of-sync with the end-user. Financial IT, not so much.

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