Bank tech job futures uncertain

Reports of banking sector cuts abound, but retail banking tech investments indicate technology workers could be spared

Reports that Australia’s banking sector is prepping to shed some 7000 jobs in the next two years future should be met with unease by the sector’s hundreds of information and communications technology workers.

In statements to Computerworld Australia, major banks stopped short of directly indicating IT staff heads would roll, but neither did they emphatically state technology-related jobs were safe.

Bendigo Bank managing director, Mike Hirst, said Bendigo and subsidiary Adelaide Bank had no “current plans” to shed jobs.

“In the past we have shown a strong commitment to our people and we have taken innovative approaches to reducing costs by working with our staff,” he said.

“There is no doubt the industry is under pressure to maintain profit levels, but we believe our bank has good growth opportunities which continue to be realised.

“We remain focussed on good customer outcomes and ensuring we are efficient in achieving that.”

In a statement, a Commonwealth Bank spokesperson emphasised the importance of technology to the bank and said there were not plans for “major” staff reductions.

"Commonwealth Bank has a long term strategic focus on productivity, and, to that end, is continuously looking for ways to use technology and process improvement to enhance customer satisfaction while increasing efficiency,” the spokesperson said.

“This may result in redundancies occurring from time to time in some areas, while in other areas more staff may be needed. There is no target or short-term plan for major staff reductions.”

The comments follow news that ANZ intends to cut at least 700 jobs while concerns emerged today that the banking sector as a whole could shed 7000 jobs within 24 months.

While cuts may come as a shock to non-IT-related banking staff, those working in technology during the last few years are likely to be used to the ebb and flow of jobs as banks progress through the major IT transformation programs which have characterised the sector for the last few years.

For example, Westpac, during its full 2011 year hired 736 full time equivalents (FTEs) in the technology department due to demand driven by the bank’s Strategic Investment Program (SIP) and the need for IT support. In addition, 273 staff were hired to support various projects.

In October NAB said FTEs fell during the 2011 year by 533 on the September 2010 year due to “a continued focus on efficiency programs and the outsourcing of some technology functions to IBM”.

A ray of hope also emerged recently via analyst firm Ovum, which is tipping the Asia-Pacific retail banking IT spending market will increase by US$1.2bn in 2012 and hit US$30bn over the next five years. The firm attributes the technology investments to the need to grow revenues.

“Returning revenues to pre-recession levels is a priority for a number of institutions, although for many it is unsurprisingly a significant challenge,” Jaroslaw Knapik, Ovum financial services analyst, said in a statement.

“Banks still need to focus on improving customer trust and increasing sales and servicing effectiveness.”

Knapik said accelerated investment in online banking or other channels such as mobile were likely due to the need for “smarter selling and servicing”. In a similar vein, investment is also expected in customer analytics and customer data management.

“As sales activities are expected to be on the rise again, banks will also boost investments into operations as the ability to sell products faster and service customers’ better is a competitive differentiator in the retail market.”

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