WESTPAC is expected to shift the work of up to 3000 of its back-room staff to overseas locations such as India over the next three years in an accelerated plan to cut costs being put together for new chief executive Gail Kelly.
The outsourcing blueprint is said to be at an advanced stage but has yet to be presented to Mrs Kelly as she prepares today to front her first financial results conference at Westpac since replacing her predecessor David Morgan at the beginning of February.
The move comes as the bank is due to unveil half-year profits of about $1.8 billion this morning and will form part of a wider plan to sharpen Westpac's front-line offering to its 7 million customers.
A focus on customer service was the hallmark of Mrs Kelly's five-year reign at her former employer, St George Bank, as she sought to challenge the branch network dominance of the "Big Four" institutions.
Back-office duties such as information technology services, transaction work and unsecured lending are said to be at the forefront of the tasks which Westpac will look to offer third-party global providers with their major processing centres in India and China.
In recent years, Westpac has joined its rival banks such as ANZ, National Australia Bank and St George in offloading such operations as mortgage processing, the provision and servicing of tens of thousands of computers and telephones to Australian-based suppliers like EDS, IBM and Telstra.
Nonetheless, it has been reluctant to fully embrace the move to send work overseas, having been conscious of the backlash of customers concerned about the security of their personal banking information and a concerted campaign by unions aimed at protecting Westpac's 28,000 jobs.
It also continues to rule out any of its frontline services such as call centres being either based abroad or handed over to foreign providers. The same also applies to actual personal data.
However, the combination of the arrival of Mrs Kelly after Dr Morgan's nine-year tenure and the pressure on Westpac's cost base caused by the fall-out of the global credit crisis has prompted a root-and-branch review of the services it offers.
As yet, no decision has been made on where the most likely candidates for outsourcing will be based. The bank is also likely to give a commitment that no actual jobs will be lost and intends to offer alternative work to the people who will be affected.
The review, though, has raised new questions over the future of some of the work at its major operations centre in Concord, Sydney, which was the subject of a successful campaign 18 months ago by the Finance Sector Union to prevent 300 out of the 1000 administrative jobs being sent to India.
Westpac said at the time that the plan did not meet its "financial and stakeholder criteria" and that it would not save as much money as originally thought.
The latest push to cuts costs comes as Westpac's new retail banking boss, Peter Clare, this week revamps the management team that saw the abolition of two key senior jobs.
He has also poached a top executive from Commonwealth Bank, Jason Millett, as his new strategy chief to help drive the changes in the division, which includes Westpac's 800-plus branches.
Danny John and Matt O'Sullivan | 1 May 08 | The Age
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