National Australia Bank is widening the range of business functions being handled at its overseas technology innovation centres to include more risk management functions in areas such as financial crime and customer verification.
The bank is in the process of expanding the number of staff at its Indian technology centre in Gurugram to conduct due diligence on Australian customers.
In the last month NAB has been advertising across online recruitment platforms such as LinkedIn to fill Indian-based positions to cover anti-money laundering and Know Your Customer activities.
While Australia’s major banks have offshored thousands of technology-related roles to India in the last decade, the relocation of risk management roles is a more recent development.
CBA led the shift in September last year when it began advertising vacancies at its inhouse Bangalore operation for specialists in privacy, data risk, operational risk and compliance.
That decision drew a mixed reaction from Australian-based financial crime specialists, some of whom raised concerns that the move had effectively marooned local expertise.
It is not clear whether the creation of new Indian-based anti-money laundering functions at NAB could have similar consequences.
NAB chief executive Ross McEwan last year justified the establishment of technology centres in India and Vietnam on the grounds that Australia did not have a talent pool sufficient to meet the bank’s demand.
McEwan said earlier this year the offshore centres would be focused on boosting NAB’s information technology and digital capabilities, without mentioning that they would also take on risk management operations.
“The vast majority of our customer interactions now happen online and we are investing heavily to deliver the great digital experiences our customers expect from us,” McEwan said in March.
“This move towards digital has only been accelerated by COVID and has coincided with a skills shortage in Australia.
“To address that we’re building a global workforce and tapping into markets like Vietnam that have a real depth of talent in digital, data and technology to complement our teams in Australia.”
While risk management experts are concerned that the offshoring of more operational risk functions could lead to senior risk roles also leaving Australia, most say they are less bothered by NAB’s move because the roles being offshored are exclusively operational.
“In a digital world, most data-driven risk roles can be done onshore or offshore, so I don’t really see that as an issue,” said leading risk expert, Dr Patrick McConnell.
“I don’t see how checking transactions and data could be done better in Australia than India.
“However, it is critical that the senior managers responsible for developing and overseeing risk management processes remain Australian-based.”
While offshoring will likely continue to court controversy, banks such as CBA, NAB and ANZ have tried to mitigate the risk of migrating business functions by establishing proprietary corporate vehicles in selected jurisdictions.
These banks directly employ workers overseas and therefore avoid many of the risks associated with outsourcing to foreign service providers.