The truth is tech is not a force multiplier in finance, except for HFT. A few firms do pay a ton for engineers (higher than google level comp), but there are probably less than 5000 of those engineers in NYC.
No. Many smaller financial firms derive their advantage from technology. There are many areas of finance aside from high frequency trading and they all benefit from significant force multiplication from technology. Even in the lowly area of operations automation there are firms that achieve significant scale with a small number of personnel through technological advantage. Granted this is sometimes achieved with a combination of in house and commercial technology packages, and sometimes the overall system design is done by non-technical people who just manage grunts to do all of the work, to say that these companies are not benefiting from force multiplying technology is foolish. There are very few financial professionals left who are not technology people in some sense of the word.
Many firms benefit from better data. All that data needs to be acquired and managed. Many firms benefit from better analytics and models. Those models need to be tested and implemented.
Source is I work in this field. There are positions with big data and data management that pay well. But the ones paying 350k+ are way harder to get than working at a top tech firm. Theres a quant trading firm called engineers gate that has a bunch of ivy league programmers, the top of the top. They havent made a nickel off their technology. They have a had a huge outflow of talent to Google and FB. People do get paid 500k+ to manage a firms data, but thats because the firm makes so much that the money splashes around, not because its a huge component of their profitability.
Even at Two Sigma, the engineers are second class to the quants.
If your cutoff is $350k, I'd definitely say your NYC 5k headcout is way too low. By at least an order of magnitude. Even the smallest trading firm will have 5 tech people (devs/data scientist/quants) making that much after bonus.
Edit: maybe $350k is at the border for that 5 each estimate. But i still think you're of by an order of magnitude in nyc in general.
If "data scientists" working at Google are considered tech roles then finance quants should be as well, right? I agree that there's a distinction between data engineers and quants but to me they're all tech roles essentially.
The difference is that quants make way more than regular engineers in finance. At google, an engineer working on the next generation database can make a ton of money, his work is extremely valuable to the firm. Engineering innovation is central. In finance, engineers in HFT did make a ton, but HFT is no longer very profitable.
This is absolutely false, tech is a force multiplier in nearly every business even if it doesn't require onsite software engineers to get that productivity bump. Look at the Bloomberg terminal in finance, Salesforce/CRM in sales, Epic in healthcare, Westlaw in legal work, the list goes on.
Now a lot of the time, firms can get a better product by purchasing one than trying to build something in house (where anyone producing HFT tech won't sell that product because it's an immensely valuable trade secret). This said, I'm sure there are forms of intelligence gathering that is also built in house by firms that allow them to implement market beating strategies.
I am only familiar with these three "Bloomberg terminal in finance, Salesforce/CRM in sales, Epic in healthcare" and these products are not what I would call a good tech
Many firms benefit from better data. All that data needs to be acquired and managed. Many firms benefit from better analytics and models. Those models need to be tested and implemented.
Your number is low.