Australian banks are said to be cutting back on their use of management consultants. The policy has yet to impact consultancy firms, which continue to hire at a merry rate.
Commonwealth Bank of Australia has said it wants to halve its AU$100 million annual spend on consultants, while National Australian Bank has also said it has cut back on spending.
The other two members of the “Big Four” banks, ANZ and Westpac Banking Corp, have sought to bring more consultancy work “in-house” with the appointment of senior management consultants to their own executive ranks, and have said they will only use outside consultants on specific business projects, according to the Australian Financial Review.
Are banking-focused management consultants likely find themselves out on the streets as a result? The answer seems to be no – or at least not yet. Ian Wilson, an executive director of Boyden Global Search, says if banks are cutting down, it has yet to have an impact of strategic consulting firms, who continue to enjoy an uplift in the market, and a corresponding growth in jobs.
Indeed, Wilson suspects that the presence of former consultants within the executive ranks of the banks may actually play into the hands of the management consultant firms.
“The consulting firms have been hiring selectively – both in the IT sector and in the banking and financial services sector,” he says. “If there was a trend the other way, the top strategic firms would not be hiring at level that they are.”
Wilson says the presence of a former private consultant in the bank often leads to greater awareness of what consultants can offer, and a better interface with strategic firms.
He points to a similar experience in the legal area. “A few years ago some banks hired top legal people in bid to reign in costs from legal firms, but in the end that simply created a greater understanding of need for specialist legal services.”