Bank boss defends offshoring
ST George’s Bank chief executive Gail Kelly stood in front of shareholders at her company’s annual general meeting to defend her bank’s decision to send 76 computer services jobs to India.
‘‘We’re competing in an environment of very strong major bank players,’’ Ms Kelly told the meeting in Sydney.
‘‘If we don’t remain competitive, St George won’t exist.’’
While St George’s employees may have been frustrated at how a bigger rival such as the Commonwealth Bank was able to back away from plans this year to send back-office jobs offshore, analysts say the relentless pressure to boost profit margins and Australia’s tight labour market means the other banks will have to revisit the issue
‘‘If the banks say they are not doing it now, it’s shelved rather than cancelled,’’ said Warren Green, Deloitte’s co-leader for financial services.
Deloitte published a survey last year showing that 57 per cent of respondents in the financial sector were either involved, or planning to become involved, with offshoring jobs.
For those companies which sent some of their operations to low-wage nations, such as India, China or the Philippines, savings could run to between 20 per cent and 40 per cent of comparable Australian costs, Mr Green said.
Commonwealth Bank of Australia chairman John Schubert told shareholders at the annual general meeting in November that the bank had evaluated sending service jobs overseas, but chose not to proceed.
The Financial Services Union (FSU) wants to keep the pressure on the banks, and this month started a radio campaign to coincide with the launch of a union website warning of the risk of data theft when banks sent some of their operations offshore. The union is calling for new laws to require the banks to tell customers when personal information is being sent offshore.