A series of job cuts by some of Australia’s biggest banks is underlining how technological change and the drive to lift profits is contributing to lay-offs in the banking sector, with Bendigo and Adelaide Bank the latest financial institution to swing the axe.
The Finance Sector Union on Thursday announced Bendigo planned to cut 158 jobs, the vast majority of them technology workers. It followed news on Wednesday that National Australia Bank was cutting 410 jobs, and on Tuesday that ANZ Bank was slashing 3500 jobs.
Several banks have announced job cuts in recent weeks.Credit: Louie Douvis
The Bendigo job cuts, which are the subject of consultation with the union, are part of a restructuring in the regional bank’s technology division, and NAB’s layoffs this week also targeted the bank’s technology and enterprise operations arm.
Atlas Funds Management chief investment officer Hugh Dive said technology was one of several reasons for the recent job-shedding by Australian banks because when banks upgraded their IT infrastructure, they expected a return from the spending.
A desire to boost profits was also a factor in the recent job-cutting, Dive said, while noting NAB, Westpac and ANZ had relatively new chief executives putting their stamp on those banks.
“They spend a lot of money on technology and there’s a reason why they spend it – it’s not just to pump up the profits of Oracle. They want a return on that,” Dive said.“If you can stop some manual handling in the back office, that’s a good outcome, and that’s what they do.”
Loading
Morningstar analyst Nathan Zaia said banks were facing inflation from staff wages, as well as costs from IT infrastructure. Zaia said when banks consolidated their IT systems it could help with risk management and make banks more efficient.
“If you can make each banker be able to write a loan faster, you probably don’t need as many bankers over time,” he said. “We are probably just seeing it happen gradually at the banks. I don’t think we are going to see a sudden step down in the number of people.”
