You're absolutely correct. Think of it like this - if you're paying a lot of money to get the top people, you'll want to use their brains. Simply put, retail banking does not provide comparable returns on investment than putting the people into hedge funds, trading, etc.
You have to bear in mind that banks (from my personal experience and from my peers) are first and foremost profit oriented, which effectively guides their decisions. Hence, you'll not see those people working on things that directly impact retail customers.
Working for Deutsche Bank, JPMorgan and the lot, starting salaries for Imperial graduates are upwards of £40k (definitely know people who are starting at £50k).
You're correct, £25k seems to be a ballpark figure for software houses. Looking at it statistically, average salary for Imperial graduates is something like £35k, so you can do the math and infer what the top grads are earning.
Hard figures - more than half of the graduates from one of the top technical universities in the UK (Imperial) go to work for banks (computer scientists that is).
The reason is that they pay quite a bit more than most software houses do. Notable exceptions include Google which usually can match the starting salaries but otherwise, you're pretty much guaranteed to earn less.
The bottom line is that after several years of student life, a relatively high salary looks compelling and coupled with student loans to pay off, the choice is quite clear at this particular moment for the majority of people.
We're a bit inexperienced when it comes to hiring people - I wouldn't expect to find anyone reasonably good with say $1k for a single week of work? The apps definitely don't require a full time person for the next six months - maybe a proper week of worth every month would be appropriate.
You have to bear in mind that banks (from my personal experience and from my peers) are first and foremost profit oriented, which effectively guides their decisions. Hence, you'll not see those people working on things that directly impact retail customers.