If you've taken out a mortgage with ANZ Bank, there's a decent chance some processing of the loan occurred in the fast-growing city of Bengaluru in India.
The banking giant has close to 8000 staff in the city, who work on everything from helping to process applications for some loans or credit cards, to developing payment platforms, to conducting checks on new business clients.
In the past, these sorts of hubs were largely call centres for foreign businesses such as ANZ. But these days, the bank's offices in Bengaluru (formerly Bangalore) focus on higher-skilled technology work. And key rivals to ANZ have followed it into the world's most populous nation, saying it gives them access to a talent pool that will help them compete.
ANZ and Commonwealth Bank even have outposts with several thousand employees in the same location, which also hosts global giants such as IBM and Phillips. While Westpac does not have staff in the country, National Australia Bank last year opened a centre in Gurugram, a city near New Delhi.
Banks maintain these growing offshore hubs are being driven by the need to access technology skills on a scale they could not do in Australia. That claim is firmly rejected by the Finance Sector Union, which says it is about replacing higher-paid Australian workers with lower-paid staff overseas.
It is part of a wider trend: global giants including JPMorgan, Wells Fargo and HSBC also have major Indian operations - JPMorgan has more than 50,000 workers in the country spread across five cities.
India churns out enormous numbers of English-speaking engineering graduates every year, making it a hotspot for IT offshoring, and banks say tapping into that talent pool helps them remain competitive in the face of major technological change.
ANZ chairman Paul O'Sullivan says the trend is part of an "arms race" in the financial world, as non-traditional players try to use technology to grab banks' returns.
"Financial services businesses have to invest significantly and attract the right talent to stay in front in a vastly more competitive world," O'Sullivan says in an interview.
For example, he says ANZ now has more staff working in technology roles than in its branches. Technology investment will remain a priority, and he says the Bengaluru hub supplements what the bank is doing and gives it a competitive strength. "Technology is now core and essential to being a banker, just as much as banking skills," O'Sullivan says.
The Sydney Morning Herald and The Age this month visited ANZ's Bengaluru operations, which were first opened in 1989. Since 2014 the hub's employee numbers have grown from about 5000 to about 8000. In many ways, the offices look similar to an ANZ office in Australia, except for some obvious differences such as the multiple clocks to show the time in cities such as Melbourne and Auckland.
Close to one of ANZ's buildings, CBA is also expanding its Indian support operations - it now has about 3500 people in Bengaluru after launching in 2019. A CBA spokesman says the Indian unit provides access to a large pool of talent and expertise, especially in technology and operations, in a favourable timezone. The people it has hired in India in recent years are part of more than 10,000 it has recruited as a group since 2021, he says, and the vast majority of these new hires have been based in Australia. "We continue to look at opportunities to grow CBA India given the access to skills and talent that the region offers," the spokesman says.
NAB, meanwhile, last year opened its own hub near New Delhi, also with roles spanning technology and operations. NAB's group executive for technology and enterprise operations Patrick Wright says it's part of a plan to build a global workforce to respond to customer demands for around-the-clock service.
"In Australia, great technology and digital talent remain highly sought after. Combine that with unemployment rates falling to the lowest levels in nearly 50 years recently and this means we have to tap into global capabilities to find the skills we need," he says in a statement.
These arguments do not wash with the FSU, a long-time critic of "offshoring."
National Secretary Julia Angrisano argues it is not a matter of skills, but of banks wanting to save money by using staff on lower wages. She says that over the long term, the trend damages Australia's economy by reducing domestic employment opportunities and weakening local industries. "Offshoring finance sector jobs is short-sighted. Banks do it because it saves them money as they reduce labor costs, but the long-term consequences are dire for the economy," Angrisano says.
Bankers concede cost is part of the story - but they say it's not the main issue. It is estimated the starting wage for an Indian graduate at a major bank is between one-third and half of what a graduate in Australia earns, although bankers say the gap between pay rates in the two countries narrows significantly in more senior positions.
ANZ's chief executive Shayne Elliott says that 30 years ago, the bank's move to India was mainly driven by cost, and he says cost is still a factor. But he maintains that today, the primary benefit to the bank from its Indian hub is to access highly-skilled staff such as engineers and data scientists and to hire them in numbers that wouldn't be possible in Australia.
"The driving force is capability at scale," Elliott says.
The reporter travelled to India courtesy of ANZ Bank.
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