ANZ boosts Bangalore as IT costs rise

Australia and New Zealand Banking Group today said it had continued to expand its Indian offshoring operation over the past six months, a move that came in the context of rising technology costs across the board.

ANZ will progressively consolidate support functions including technology and operations ... to increase scale and efficiency

ANZ financial statements

The bank's Indian division performs a number of back-office tasks for it, including some technology work but also business process initiatives and more.

The company said in its financial results briefing released today for the six months to 31 March that total personnel numbers in its Europe, America and India division increased by 1240, "with the expansion of operations and technology support activities in India". The bank's unions have previously raised concerns about the movement of jobs to India.

The news came as the bank flagged both continued investment in technology as well as an ongoing reshuffle of staff within its technology and operation division.

ANZ's overall computer costs for the six-month period rose to $351 million, compared with $308 million for the half-year to September 2008, and $299 million for the same period to 31 March 2008.

The bank said the increase was mainly due to software purchases ($16 million) incurred from higher licensing costs in its Global Shared Services division, as well as the cost of depreciation ($14 million). The remaining millions comprised a number of small increases, including data communications costs up by $5 million and written-off software, and rental and repairs.

The bank's Institutional division said it was continuing to increase its investment in technology, with costs associated with its "Rebuild and Refocus" program growing. In other sections of the statements, ANZ said the Institutional division's rising technology costs related to platform development in its Transactional Banking and Markets segment.

The ongoing internal reshuffle of processes and staff has also taken its toll on the bank, with costs of $218 million ($152 million after tax) being incurred from "process re-engineering" within the bank's Operations, Technology and Shared Services division.

It also allocated funds to an ATM network upgrade. "ANZ will progressively consolidate support functions including technology and operations within divisions and within ANZ's shared services function to increase scale and efficiency," the bank said in the briefing documents.

The bank has not yet appointed a replacement for its chief information officer Peter Dalton, who now has a new innovation position sitting beneath the bank's marketing chief and group managing director of the Operations, Technology and Shared Services David Cartwright, who is jointly managing technology at the bank with deputy CIO Kieren Griffiths until the bank replaces Dalton permanently.