First Union calls for government to 'do whatever's necessary' to stop big banks offshoring & outsourcing jobs, fearing there's more of it to come

First Union is calling on the Government to "do whatever’s necessary" to prevent the country's big banks from offshoring jobs overseas, or outsourcing them to other New Zealand entities, in cyclical corporate behaviour it says is based on "unlimited greed."

Callum Francis, First Union's national organiser for finance, says union members working for three of the big four banks have repeatedly raised concerns about the volume and nature of hundreds of banking jobs outsourced to a third party provider or offshored to countries such as India and the Philippines. Francis says, according to bank workers, customers are suffering from worse service while bank workers face redundancies and job insecurity, and NZ’s financial sector loses key expertise and growth opportunities.

"The driving force behind banks’ offshoring and outsourcing of New Zealanders’ jobs is a desire to reduce wage expenditure and increase profit margins at any cost - it’s based on unlimited greed," Francis says.

"During a time of increasing unemployment and a rising cost of living, it’s unfathomable that successful companies would prioritise increasing already obscene or super-normal profits at the expense of New Zealanders and the communities that support them."

'Committed to serving customers brilliantly'

Just last week BNZ confirmed plans to shift 40 to 50 lending services jobs from NZ to Accenture in India. Of this a BNZ spokesperson says the bank's "committed to serving our customers brilliantly and delivering market leading products, services, and expertise." 

"We want to bring the very best global expertise and capability and deploy it locally, to enhance our customers’ banking experiences. To help us bring global best practice to New Zealanders, we partner with a number of international organisations, such as Accenture, Microsoft, and Amazon," the BNZ spokesperson says.

First Union released what it describes as current offshoring and outsourcing projects at ANZ, BNZ and Westpac based on restructuring and consultation documents provided to affected union members. They are;

• ANZ, over the last 2 years, has been reducing or reallocating lending services and other back-office roles (non-customer facing) and functions. Initially, ANZ started with what was referred to as a "50/50 split of work"; sending 50% of the work offshore to be completed. However, this has been a starting point for a further redistribution of jobs offshore. The eventual outcome in most instances has been at least a 25/75% split favouring offshored jobs rather than keeping work in NZ. Francis estimates that hundreds of jobs have been offshored by ANZ over the last two years. ANZ declared a statutory net profit of $1.04 billion for the six months ended March 2024.

• BNZ have been even more aggressive in their approach to offshoring NZ jobs. Last year, BNZ got rid of approximately 80 roles from within their financial crime operations by offshoring 75% of the fraud team. This signalled the beginning of another more recent process with similar justification provided to offshore another 40 roles from lending services and "non-customer facing" roles who deal with apparently "less complex" transactions. Francis estimates that at least 130 jobs have been offshored by BNZ over the last two years. BNZ declared a statutory net profit of $762m for the six months ended March 2024.

• Westpac has for 5 years been outsourcing a significant number of roles to a 3rd party provider [in NZ]. This has meant that they have moved to a model of 50% (if not greater) of all contact centre general queries being answered by workers employed by a 3rd party. This has unfortunately paved the way for 1/3rd of the work received by the bank's customer care department to also be received and actioned by this 3rd party. Francis estimates that at least 100 jobs have been outsourced by Westpac over the last two years. Westpac declared a statutory net profit of $477m for the six months ended March 2024.

Francis says he's not aware of any such activity at ASB.

"All I can say is that we're not aware of whether ASB is doing it or not because if they are doing it, our membership is potentially not affected or not affected as far as I know," Francis says.

He says First Union has nearly 2500 members working for the big four banks.

'We have grown our headcount'

Interest.co.nz sought comment from the big four banks.

A Westpac NZ spokesman says Westpac hasn't recently offshored any roles and doesn't have any plans to do so.

"We have grown our Westpac headcount by more than 500 people since September 2021.  We have onshored roles in tech and financial crime, and have plans to bring more tech roles onshore in the coming year."

"A small number of contact centre and customer care roles are outsourced to a New Zealand-based company, to ensure we can continue serving customers as flexibly and effectively as possible," the Westpac NZ spokesman says.

An ANZ NZ spokeswoman says like any business operating in a competitive and challenging environment, the bank s always looking to streamline and simplify its operations.

"ANZ Group has had teams based in Bengaluru and Manila that provide technology, operations, analytics and other support functions to other parts of the Group for many years. We call them our Group Capability Centres."

"These Group Capability Centres are home to around 20% of ANZ’s global employee base; with around 10,000 ANZ employees with technology and leadership skills that support operations and innovation across all our divisions and functions across the world," the ANZ NZ spokeswoman says.

"ANZ NZ utilises the services of our Group Capability Centres for various functions, generally non-customer facing tasks that complement and support the work of our teams based in NZ. This gives us access to leading edge capabilities that are hard to replicate locally at scale."

She says it also helps provide NZ customers with access to services when they need them, including after-hours scam and fraud support.  

"We’ve been using our global workforce for a long time – over 35 years. We will always have a big presence in NZ, supported by dedicated and specialised ANZ teams around the world."

 "Where the roles of NZ based staff may be impacted by any transfer of work to our Group Capability Centres, we work closely and consult with all staff who may be affected by changes to their roles and, where possible, we find them other roles with ANZ. Many staff are redeployed into other roles," says the ANZ NZ spokeswoman.

"In relation to whether ANZ NZ has outsourced roles to other entities within New Zealand in the last two years. Like most businesses ANZ NZ has various services provided by external companies – for example property management outsourced to CBRE."

ASB and BNZ are yet to respond to requests for comment.

Tip of the iceberg?

Francis is concerned the moves by ANZ, BNZ and Westpac to date might be just the tip of a large iceberg, worried offshoring and outsourcing jobs could ramp up further during this part of the business cycle.

"If you think about it, there's not much value in an organisation offshoring 20 to 50 jobs from a department because it's a complex process to do it, to set it up, to make sure everything's in place...It's not cost effective. It doesn't make a lot of sense. So there must be a broader plan and more jobs that are going overseas. I think it's just kind of the writing's on the wall, to be honest," says Francis.

So what does First Union want the Government to do?

"The Government needs to do everything possible. Critically, from our point of view, it's to protect workers and to keep jobs in New Zealand."

"It's important that they send a signal to employers and the industry that there's a requirement, if not an obligation, on these organisations to not just keep jobs and expertise in New Zealand, but to help the country grow," says Francis.

"It's just disappointing to see these organisations, I'd say, almost foregoing their social obligations and responsibilities to New Zealand. Because if these guys aren't going to try and keep jobs in New Zealand, it's just going to set a precedent."

Francis argues the highly profitable big banks should be supporting people and communities and creating opportunities for them. Instead they are "abandoning our communities and turning their backs on New Zealanders, just because they think it'll make them a few extra bucks."

"Offshoring should be seen for what it is - an admission that banks would rather send jobs and opportunities overseas where labour is cheaper and less regulated, when they should be building capability within New Zealand and helping to develop a progressive industry."

He argues offshoring robs NZ financial services workers of opportunities to upskill, and depresses pay rates across the entire industry.

'Difficult for a government to intervene'

Commerce and Consumer Affairs Minister Andrew Bayly says it's disappointing to see services and jobs moving offshore.

"I think it's important that we do have those sorts of services, but ultimately, these are commercial enterprises, and they're trying to achieve the best outcomes for their shareholders...and it's difficult for a government to intervene in things like that. But yeah, it's disappointing to see jobs leaving New Zealand," Bayly says.

As of March 31, ANZ had 7,185 staff in NZ, down 67 year-on-year. Westpac NZ had 5,263, down 111 year-on-year. And as of September 30 last year, BNZ had 5,400, up 154 year-on-year.

*Bayly comments courtesy of Dan Brunskill.