Bank plans to move more jobs offshore
National Australia Bank plans to move part of its back-office to India, fuelling fears of more job cuts just days after it announced that it was axing 4200 positions.
It follows similar announcements from other banks and insurance companies that are looking to benefit from the lower wages paid in countries such as India and the Philippines.
A spokeswoman for NAB said the move was part of a pilot project that would affect up to 20 positions in accounts processing.
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However, the national secretary of the Finance Sector Union, Paul Schroder, said that hundreds of jobs at NAB could be affected as the bank looked to cut costs.
"Why else would they be doing the pilot project if they weren't serious about it?"
NAB is talking to companies in Bangalore, southern India, about the project, but no contract has been signed.
"We are looking at opportunities to outsource a small back-office processing area," an NAB spokeswoman said on Friday. AdvertisementAdvertisement
"We are doing the due diligence on that, and if we make a decision to go ahead with it we will make the relevant announcements. We will be looking at this as a learning experience."
The union has been meeting NAB officials every day since the bank announced it would shrink its global workforce by more than 10 per cent last week - more than 2000 of them from Australia. So far the union has identified 800 of the local jobs to be cut.
The bank is also axing 1700 jobs in Britain and another 500 from head office and its insbreastutional markets business.
Mr Schroder said "offshoring" was an industry-wide issue as financial services companies were increasingly looking at increasing earnings growth.
ANZ led the move offshore, setting up an IT subsidiary in Bangalore in 1988 that now employs more than 500 people, accounting for more than one-quarter of its IT staff. The life insurer AXA Asia-Pacific also has an IT operation in Bangalore.
The Commonwealth Bank has foreshadowed plans to set up a representative office in India, to look at banking and IT outsourcing opportunities.
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HBOS, which operates under the BankWest brand in Australia, said recently that it was discussing outsourcing options with two Indian IT companies, and GE already has a business processing centre there.
NAB's chief information officer, Ian MacDonald, visited India earlier this year, prompting speculation the bank was looking to move part of its IT software development area offshore. However, a spokeswoman for the bank said the current project would not affect its IT department.
The bank's chief executive, John Stewart, said yesterday that he could stay at the bank beyond 2007, when his contract expired.
THE DISAPPEARING POSITIONS
. In the US 500,000 finance jobs may go overseas over the next five years.
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. In Britain in the seven months following October 2003 more than 14,000 jobs went offshore.
. The annual salary of a call centre worker in the Philippines is $US4000. The salary of a call centre worker in the United States is $US46,000.
. Workers in the Philippines are required to respond to 400 calls a day. In Australia it is closer to 80.
Source: the Finance Sector Union
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