As banks are well aware, many new software engineers would rather work for Google or a hot new start-up than enter the banking industry.
To attract talented new workers and to make sure they are up to speed on the latest trends, banks and technology vendors work closely with universities to help prospective employees develop the right skills before they even look for their first job.
"There is completely a growing need that we see across our firm," to develop and attract new talent in this way, says Jill Pineiro, the global director of JPMorgan Chase's (JPM) corporate development program.
JPMorgan Chase developed educational programs with Syracuse University that began in 2008 and the University of Delaware that began in 2010, committing over $30 million over 10 years and $5 million over 5 years, respectively, to groom talent at each institution.
"It's great for us because they understand that JPMorgan is, yes, a financial institution, but it takes a tremendous amount of technology" to run, she says. The bank "needs help there."
JPMorgan Chase also offers students paid internships through technology hubs on each campus.
Similarly, the technology vendor Fiserv (FISV) sponsors an honors class at the University of Nebraska-Lincoln's Jeffrey S. Raikes School of Computer Science and Management, where undergrads work on real-world problems for the core banking provider.
"We want to show that there are some very cool aspects" to creating bank technology, says Jonathan Nordhausen, a Fiserv director of product management who works in Lincoln, Neb.
"We are almost taking the voice of a customer to the next level," says Nordhausen. "They are coding how they would want to interact with the bank … five years down the road."
The six-year-old program has produced mobile apps that have made their way to the real world, he says. The program's latest project, which is still in development, is a money movement smartphone application for small-businesses and corporate customers.
About three years ago, NCR (NCR) moved from Dayton, Ohio, where it was based for about 125 years, to Duluth, Ga. NCR's decision to move was based in part on its desire to draw design talent from academic resources, such as Georgia Tech and Clayton State University.
These partnerships also help NCR retain its current employees by furthering their education, says Mary Kynkor, NCR's vice president of talent and organization effectiveness.
"People are looking for that investment from businesses," Kynkor says. They want to say, "Hey, this company really does care about me," she says.
VeriFone Systems' (PAY) chief executive, Douglas Bergeron, sponsors a scholarship for undergraduate women majoring in math, science, technology, or engineering at Georgia State University and the University of California, Berkeley.
The scholarship winners, who are also usually minority women, are paired with female technology executives who act as mentors.
"The technology industry in general, but specifically start-ups, is just completely devoid of women," he says. "If you believe the notion that technology advances society, then we are only getting about 50% of the horsepower right now because there are very few technology businesses started by women."
T8 Webware, a Cedar Falls, Iowa, company that develops software for retail banks, has 16 students working as interns in its 59-person workforce.
"When it comes to our interns our focus is to teach them how to program well for [Google's Android and Apple's iOS] devices," says Wade Arnold, T8's CEO. "We are consciously trying to flood the market with iOS and Android developers who are good."
Of the interns T8 offers to hire, nearly all accept, he says. "The idea is: 'Let's graduate 20 a year, who know how to do it, so we can pick up eight who are the best."
Colleges have also been proactive in establishing programs that develop talent for financial services companies.
Last week, Stevens Institute of Technology in Hoboken, N.J., launched its Financial Systems Center to run probabilistic modeling for brokers and traders. The aim of the center is to provide bankers and others with risk management tools.
The quantitative finance program is roughly two years old, says George Calhoun, the school's director of the quantitative finance. But for the past four years, he's been interacting with financial companies as they come and recruit at Stevens with computer science majors, he says.
"Citibank, JPMorgan Chase, Deutsche Bank, HSBC: these are all the firms that we have placed graduates with," he says. "I expect to be working with probably almost any major bank in this area."