Australia’s banks haven’t finished downsizing yet – plenty more positions are in peril as cost cutting, consolidation and outsourcing continue to ravage the finance industry.

Last year KPMG predicted that 10,000 jobs will be slashed from the sector during the current downturn.

That now looks like a good guess. Financial institutions have already shed 6,768 staff since they started scaling back in early 2008, according to figures from the Finance Sector Union of Australia. So if KPMG’s prediction proves roughly right, more that 3,000 jobs could still be on the line this year.

And the cuts won’t just affect credit-crunched global banks – local firms will be hit too. ANZ has announced plans to move 100 call centre jobs to New Zealand. And the union points to AMP and Westpac as prime candidates for making more cuts. Macquarie, which has already let go of about 1,200 people – has its axe out too.

“Given the current situation in the financial markets, most institutions are focusing on cost-reduction and efficiency drives and as a result, line managers are having to cut costs by a certain percentage. These managers will be looking at all possible options and this may include further headcount reductions,” says Vanessa Harding-Farrenberg, joint managing director of Morgan McKinley’s Sydney office.

Other reasons for potential downsizing may include continued off-shoring for process-orientated jobs, middle-management rationalisation, and role duplication as a result of banking sector mergers, she adds.

Domestic banks may make further cuts after announcing fiscal-year-end results. “Only then will we begin to better understand their financial position and assess just how many further redundancies they might need to make,” says Nik Ruparel, director, Hudson Financial Services.

Ruparel reckons the Big Four banks haven’t had to cut many top-level staff so far. “But we’ve now reached a point where organisations are having to make difficult decisions about high-performers. And it’s not just one bank – they’ll all be looking at this.”

Corporate finance and the equity and debt markets are currently quiet, so investment banking divisions will remain under pressure, adds Ruparel. “By contrast, in retail and commercial banking, there is still competition to secure the best talent for sales and relationship-manager roles.”

Banks are putting more emphasis on performance, he says. “Under-achievers will be exited earlier and new employees will have less time to become successful in their jobs.”

How many more finance jobs do you think will be lost in Australia? Let us know below.