Wall Street is not known for shying away from a tough fight — a reputation that could come in handy as financial giants gear up to best tech companies large and small in the ongoing war for tech talent.
For years the tech industry has been eating Wall Street's lunch when it comes to such talent. Whether it's to up-and-coming startups, fintechs or tech incumbents, big banks have seen their fair share of senior execs depart to firms offering the promise of fast growth, high salaries, and less rigid working environments.
But this year has been deeply unkind to public and private tech companies, and Wall Street execs who have previously lamented how difficult hiring has become are keen to push the advantage as their competitors either lay off staff or deploy hiring freezes.
Since January 1, the tech-focused Nasdaq Composite Index is down nearly 30%. And second-quarter venture-capital funding to startups fell 26% from the previous quarter, Crunchbase News reported this month. Multiple fintechs, from Robinhood to Coinbase to Klarna, have announced job cuts or recruiting freezes. Big Tech isn't immune, with Facebook and Twitter announcing their own freezes this spring.
The stage is set for the hiring tide to turn, and banks haven't been shy about their intentions to step into the breach.
But bringing all those workers to finance will be challenging as banks look to match the once-lofty salaries — and the flexible culture — of tech companies. While some financial firms have expressed an openness to the remote working environments that became prevalent during the pandemic, for example, others have maintained that the office is the best place to work.
In addition to the pay and perks, it could be hard for financial companies to compete with the pure romance of startup life.
Even after having an offer rescinded from Coinbase earlier this year, one former employee of a large bank told Insider they were not deterred in their efforts to leave Wall Street for the startup world.
"I want to stay the course and be a big bank drop out," the candidate wrote to Insider. "After 22 years of bureaucracy and politics, I'm ready for something new and sexy!"
Banks are ready to pounce as tech hiring cools off
Throughout the pandemic, financial firms on both the buy and sell sides faced what many say was the most competitive tech talent market in years as compensation skyrocketed across the industry.
"Over the past two years, we have seen the most active market for engineering talent in recent memory," Two Sigma's Chief Technology Officer, Jeff Wecker, told Insider.
It hasn't been any easier in banking, Stuart Riley, the global head of technology for Citi's Institutional Clients Group, told Insider this June. "I would say the last 12 months have been the most competitive [hiring] market I've seen in my career as a technologist," Riley previously told Insider.
Todd Cassidy, CIO of associate experience and chief of staff of technology at Capital One, told Insider that financial firms have been affected by "a huge imbalance of supply and demand" — or simply too few technologists with too many job openings.
It hasn't stopped banking giants from looking to hire in large numbers for their tech organizations, or from filling seats, albeit slower than some firms would like.
Capital One hired 3,000 technologists in 2021 and has "hundreds" of open roles now available, Cassidy said.
This year, meanwhile, Citi has said it plans to hire 4,000 technologists in its institutional clients group alone, while firms like Wells Fargo and TD Bank have also touted their plans to hire thousands of technologists.
The depth and breadth of technology required to run a bank is drastically different than it was a decade or even five years ago. The pandemic accelerated twin trends towards digitization and the cloud that now require new sorts of tech skills and experiences. Chief information officers, viewed not too long ago as the "back end IT person that was managing your desktop" are emerging as key leaders, while banks are taking inspiration, and talent, from Big Tech giants.
"There's a recognition that how customers do business with banks has permanently changed. And the branch, and reducing branch numbers, is the tip of the iceberg," Chris Marinac, director of research at Janney Montgomery Scott, told Insider. "Now the whole process is getting reorganized. That's where the technologists and the thinkers come into play."
Wall Street firms are now hoping the turbulence in the tech and crypto worlds will turn the tides in their favor.
"There's no question — the companies that have committed to digital-asset strategies need talent and they see this as an opportunity for sure," Todd Taylor, who leads the global financial services practice at search firm Heidrick & Struggles, told Insider. He referenced an exec of a multi-trillion dollar asset manager focused on digital assets who called the current tech industry chaos "an opportunity."
"Banks could be a safe haven," Taylor said.
Here's why Wall Street might have trouble
While banks have been clear in their desire to hire thousands from the tech sector, offering a career to match the salary levels and lifestyle of the startup world might prove a challenge.
As Insider has previously reported, demand for tech workers across industries hasn't slowed this year. Further, banks might still be priced out in competition with Big Tech and startups.
When they were hiring, base compensation for entry-level candidates at giant fintech startups like Robinhood and Coinbase reached $180,000 annually, Jayson Bevacqua, a vice president at financial search giant Selby Jennings, told Insider. Such salaries were "leaps and bounds" above what "JPM or Goldman could do," Bevacqua added, which typically tracks closer to $180,000 for vice-president levels with seven to 10 years of experience, he added.
Insider has previously reported that, as one example, JPMorgan engineers and developers can earn a wide range in annual base pay, per publicly available visa data. According to 2019 disclosures, for example, vice presidents in engineering could expect to see between roughly $140,000 and $250,000 a year at the bank.
"Basically someone at the VP level at Goldman would be getting paid as much as a junior engineer who went to a really good school and then got an offer from a Robinhood, Coinbase, or even Klarna," said Bevacqua. And as Insider has previously detailed, even at the world's biggest quantitative hedge funds, entry-level salaries hew more closely to bank levels than tech ones.
"We continuously benchmark against other financial services and technology employers and offer competitive compensation. This is partly how our hiring has continued to be strong," a spokesperson for JPMorgan said.
Spokespersons for Goldman Sachs and Coinbase declined to comment, and a spokesperson for Robinhood did not respond to a request for comment.
Of course, many tech startups have run into trouble precisely because of the unsustainable salaries they offered candidates, and industry experts say that compensation within tech, particularly stock-based compensation, will naturally have to come down. But such changes take time to play out across industries, Capital One's Cassidy said.
"Folks that may be either doing layoffs or pulling back from hiring, we haven't yet seen that show up as easing in the marketplace. It's still really competitive," Cassidy said. "We're hopeful that some of those things will ease some of the competition in the market."
Apart from compensation, a less definable but just as important factor might stand in the way as banks look to recruit from tech companies. The cultures of the two industries can be vastly different, especially as the pandemic underscored the importance for many of flexible working arrangements — which tech companies have embraced and some banks continue to scorn.
There is some evidence that tech workers' flexible work demands are already putting pressure on banks. Bank of America and JPMorgan have both told some tech workers they can come in just two days per week. JPMorgan even told some workers in Chase's payments division they only have to come in six days per month, Insider previously reported.
Other cultural differences that stand to be a barrier to financial firm recruiting include the idea that Wall Street moves slowly while Silicon Valley prioritizes speed and growth.
Another worker who had an offer rescinded from Coinbase this June, albeit from a non-technical background, told Insider that "I would be open to going back to financial services, but they don't always move as fast."
That being said, "it was disappointing to see how caught off guard they were," the employee said of Coinbase, adding they are now looking for "security."
