Westpac’s decision to unwind its controversial offshoring strategy has stoked hope among senior union officials that other banks might also begin to repatriate jobs sent overseas in the last decade.
Westpac chief executive Peter King revealed on Wednesday that his bank will reinstate around 1000 jobs in Australia after the Covid-19 pandemic paralysed the work of mortgage processing and call centre contractors in India and the Philippines.
The bank suffered a sharp fall in home loan volumes in April and May partly as a result of customers having to wait more than more than three weeks to get mortgage applications approved and processed.
Westpac relies heavily on external service providers in Bengaluru and Jaipur to process home loan applications from Australian customers, but their operations were frozen in April when the Indian Government imposed a lockdown on the city to manage the pandemic.
The move triggered months of chaos in the bank’s mortgage supply chain, with several Melbourne home loan brokers telling Banking Day they had to wait more than 30 days for Westpac to complete mortgage discharges.
King acknowledged that the decision to repatriate home loan processing roles stemmed from the operational delays caused by the pandemic.
“While we have added additional resourcing to support unprecedented demand following Covid-19, and I thank our teams who have worked tirelessly helping customers, at times our response rates have been too slow,” he said.
“Today’s announcement is a further step in transforming our business and mortgage operations, helping to support local employment, reducing the risk of offshore disruption and accelerating our ability to simplify processes through digitisation.”
King also highlighted that the bank would be returning all call centre roles from India and the Philippines.
“This will mean when a customer calls us, it will be answered by someone in Australia,” he said.”
King said the restoration of 1000 jobs in Australia would initially add A$45 million to annual operating costs.
Finance Sector Union national secretary Julia Angrisano called on other local banks to follow Westpac’s move to dismantle offshoring programs.
“The FSU has long campaigned against the offshoring of Australian back-office and call-centre jobs to Asia,” she said.
“Covid-19 has shown the folly of sending jobs that were once done in Australia offshore to places like India and the Philippines.
“We have seen too many jobs sent overseas in the name of increasing bank profits and it’s time every Australian bank and financial services institution brought those jobs home.”
While there is a prospect of more banks repatriating work to Australia, it seems unlikely that the big banks will abandon offshoring programs altogether.
ANZ has the largest offshoring program of the four major banks, directly employing around 10,000 processing, call centre and technology staff in India, China and the Philippines.
There is little evidence to suggest that ANZ is planning to unwind parts of its offshore program.
ANZ’s Indian operations were less disrupted by Covid-19 because the bank was able to organise for staff to work from their homes in Bengaluru.
Westpac’s offshoring arrangements were more complicated because it had no direct control over people working for outsourcing partners.
Although Westpac’s