The logo of the ANZ Banking Group is displayed in the window of a newly opened branch in central Sydney, Australia, April 30, 2016. Reuters/David Gray/File Photo

Australia's largest banks will cut jobs by 12 percent to make way for new technology, experts predict. The move is also being perceived as an effort to cut costs. NAB, Commonwealth Bank, ANZ and Westpac could possibly slash up to 20,000 jobs. There are fears that some full-time positions may be gone this year.

NAB announced in September that it will slash its job force by 6,000. The reduction equalled 12 percent of its workforce.

Since NAB is getting the ball rolling, CLSA analyst Brian Johnson said it is paving the way for other banks. He told the Australian Financial Review that he thinks the rest will follow. “We are in a low-growth world and the banks have given staff above-inflation pay rises of 3 per cent across the board.”

NAB’s move would make way for 2,000 digital jobs. It had also set itself the goal of employing 600 specialists in software engineering, data, architecture and security.

Victoria's Treasurer Tim Pallas said he was expecting a “disproportionate number” of job losses to hit his state. He told reporters that he believed it could be the case as “headquarters are based here.”

The AFR noted that a 12 percent reduction across the board would equal just under 20,000 roles. Amid the changes, the bank said it was paying globally competitive rates to secure the best talent as banks feel the need to invest in the right capabilities in a highly competitive market.

Westpac saw only one percent reduction of its jobs last year. ANZ has cut 10 percent of its employees, which was equivalent to 5,456 people. Commonwealth Bank, on the other hand, added 100 staff.

ANZ has suggested there will be fewer branches in the future. It was among the first to embrace the Agile management technique. It admitted that this system of working means fewer employees would be needed. Johnson said it appears pretty clear that ANZ is “taking out a raft of middle management.”

Automation and job losses

Ian Pollari, KPMG's head of banking, said there was a certain degree of inevitability regarding job losses as more processes become automated. Employing more professionals comes with its own set of challenges.

"The challenge for the banks is they are not alone in their pursuit for these highly sought-after skill-sets and capabilities, often competing with international technology companies for these types of professionals,” Pollaris said. He added it could lead to upward pressure on wage costs.

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