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ANZ steps up shift of jobs offshore

ANZ steps up shift of jobs offshore

ANZ Bank flags plans to transfer an undisclosed number of information technology jobs overseas as it chases A$200 million a year in cost savings.

Australia and New Zealand Banking Group has flagged plans to transfer an undisclosed number of information technology jobs overseas as it chases A$200 million a year in cost savings. The move would add to the roster of 3000 workers that ANZ has in its Bangalore centre, in India, which supports computer system development and maintenance for the bank's businesses across the region.

The transfers would continue a gradual shift of technology jobs offshore that ANZ has pursued in recent years and would partially offset rises in local headcount driven by Basel II and anti-money laundering compliance programs.

In a briefing accompanying ANZ's full-year financial results yesterday, chief executive Mike Smith could not confirm the number of jobs affected by the transfers. However, the bank expects to save about $200 million a year from 2010 through a range of initiatives that include the relocation of some full-time positions to the Bangalore centre.

The transfers sit alongside a recent restructure of the bank's information technology operations that was instigated under the company's One ANZ program.

The bank yesterday reiterated that One ANZ aimed to simplify the bank's computing operations.

Chief information officer Peter Dalton told staff this month that the restructure would centralise some functions and support ANZ's push to "become a technology-based, super-regional bank".

It also involved the appointment of a host of information technology general managers, including the naming of Bangalore centre boss Ranjani Ranganath as general manager of technology strategy and business management.

ANZ is relying heavily on the Indian-based facility to develop core banking systems for its Asian banking strategy and the centre is also expected to play a similar role in the replacement of the bank's ageing transactional platforms in Australia.

The lender is yet to set a timetable to replace its core banking systems in Australia, but similar initiatives at Commonwealth Bank of Australia and National Australia Bank are under way and budgeted at $580 million and $1 billion, respectively.

In 2008, investment in information systems helped push ANZ's computer operating expenses up 3 per cent year on year to $609 million.

The value of deferred software spending on the bank's books shot up 35 per cent to $625 million, mirroring a rise in software capitalisation at NAB detailed as part of its full-year results announcement this week.

The ANZ's computer operating cost rise was spurred primarily by a rise in contract labour expenses from $50 million a year ago to $73 million and an 11 per cent year-on-year lift in rental and repair costs to $81 million.

Declines in software acquisition costs and data communications expenditure in part offset the increases. Telephony costs rose from $55 million in 2007 to $58 million at September 30.

Technology-intensive compliance programs such as AML remediation also helped to spur cost increases and the ANZ has previously said it expects to spend $66 million by 2010 to ensure it meets new federal anti-money laundering requirements.

Fairfax Business Media

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