I’m a software programmer in an investment bank and I can see a problem on the horizon. Right now, I produce software for a derivative trading desk, but this year that desk has begun hiring computer scientists instead of finance of mathematics graduates into analyst (e. junior positions) positions. I’ve been to town halls where the desk head for this business boasts of giving opportunities to unconventional candidates. These programmers turned traders are a sign of things to come.
On one level, it makes sense. If you’re a bank looking for a trader, a computer science graduate will make a good candidate – especially at the analyst level. An analyst does the repetitive and administrative tasks for the desk. When you’re an analyst, you won’t trade without supervision or manage your own books until you’ve learned the ropes. This is where being technical can make all the difference. If you’re a computer science graduate, you may be able to partner more effectively with technology teams and automate arduous processes yourself. If you can’t, you will be wasting time doing things manually. If you’re a stereotypical programmer, and are an unemotional nerd, you should also do well in a high-pressure and information rich environment.
What makes sense for the trading side of the business, however, may not make sense for the people working in technology. If you’re a programmer like me, working with a business full of people who are coders is a major headache – for exactly the same reason that the business likes them.
Why? I know from experience that the business likes to develop what we call, ‘User Tools’. Traditionally, these were business processes with elaborate implementations in Excel and/or Access. In my career I’ve seen things as fundamental as client order books maintained in Excel and passed around globally via e-mail. It’s the type of thing carries huge operational risk. When you’re a front office technologist like me, your role is to come along and systematize these processes. That’s hard enough when you have a huge Excel file, but it will much more difficult when the user tools are complex programs in Python or Java, without reference to any wider strategy or models.
Equally, what about being able to hack your way around controls? This s quite easily done if you have the technical chops and a bit of operational knowledge.
At the moment, there are two types of users that are a nightmare to deal with when you’re working for a tech team in the front office: the technically clueless and the super technical. We much prefer dealing people in the middle of that spectrum. It’s obvious what the difficulties are when you’re working with people who struggle to use software other than Bloomberg and Outlook. But the super technical present a different kind of challenge – they can be very snarky when systems fail, and more often than not will end up attempting to tell you how to do your job. In fairness, traders have always been relatively technical and much more comfortable with technologists and quants compared to salespeople or bankers.
Whether a bank hires computer science graduates or not, it’s increasingly becoming the norm that all new front office analysts will have to go through a mandatory coding course. What we’ll end up if we’re not careful are therefore trading floors full of half-baked coders, creating a sea of isolated tools, who like to tell technology how to do their jobs and what that last error message means. I can’t wait.
Joe Jones is a pseudonym
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