Westpac has said that savings from the streamlining of back office and IT operations announced yesterday will be reinvested into its massive IT overhaul, but group CEO Gail Kelly has also said that the efficiency push will cost jobs, and may see some workers pushed offshore.
Westpac told ZDNet Australia that while it won't yet comment on specific efficiency initiatives, the work to make the back office more efficient will deliver benefits to its multimillion-dollar IT agenda.
Westpac's technology agenda involves implementing a new IP telephony system in all of its bank branches; upgrading two datacentres and decommissioning another; migrating five million paper signatures into a new, faster digital system; and installing a new collections case-handling system for retail and business banking customers. It will also see the bank roll out a new online banking platform for retail, business and corporate customers.
"We certainly recognise the new reality of banking," chief executive Gail Kelly told analysts yesterday.
"We're into a slow-growth period, and we expect that's going to be continued in the period to come."
More details on the new productivity plans will come when the bank releases its full-year profit in November, but Kelly indicated that it would involve job cuts.
"Staff will come down somewhat over the year we are in, and will come down somewhat over next year, but there are quite a few moving pieces," she said.
Staff numbers changed frequently in IT and technology areas, Kelly said, adding that the efficiency push would require work from both offshore and onshore stakeholders.
"Clearly, that involves sourcing some services from some players that are onshore, and some players that are offshore," she said.
Westpac shares fell 92 cents, or 4.35 per cent, to close at $20.25, much more than its rivals, which lost between 1.2 and 1.6 per cent.