Abie Sano has the Commercial Bank of Ethiopia’s (CBE) executive team consider outsourcing the management of automated teller machines (ATMs) to a third party. Potential bidders began vying to bag a lucrative contract managing the country’s largest ATM network.

Two weeks ago, the CBE called for expressions of interest; Abie and his team are expected to pick the contractor in three months.

The Bank’s sheer size and a need to focus on core operations are behind the decision to outsource ATM management, disclosed Dahlak Yigezu, vice president for digital banking. Abie sits at the helm of the CBE, the most highly capitalised financial institution in the country. By the end of last year, CBE’s capital reached 59 billion Br, accounting for over a quarter of the industry’s aggregate.

Abie had served as CBE’s president for a year before leaving in 2009, replaced by Bekalu Zeleke. He returned to the top job two years ago, following the departure of Bacha Gina. Bekalu now serves as president of the Bank of Abyssinia (BoA).

By the end of the last financial year, the 80-year-old CBE enjoyed deposits topping 735 billion Br. An aggressive branch expansion strategy and the deployment of electronic payment machines were attributed to the hefty deposits. The Bank has opened about 700 branches over the past five years, pushing its network to 1,900.

However, the sprawl comes at a cost. CBE executives found that keeping the momentum with a workforce of 28,000 has become daunting. The CBE is not alone. The banking industry faces a shortage of skilled and experienced labour. With 140,000 jobs, banks are among the country’s largest employers. The shortage of skilled workforce has forced the banks to adjust salaries regularly and offer pay above the average labour cost and benefits packages. This has pushed operating expenses over the edge.

The arrival of new players to the industry adds pressure on the management of CBE. No less than three commercial banks have opened for business in recent weeks. CBE executives are convinced that by hiring a contractor to manage ATM operations, they can trim operating expenses and overhead costs while concentrating on strategic areas and core banking activities.

It would not be a territory new for the state-owned financial giant.

The CBE has outsourced its security, messenger, and cleaning services to Commercial Nominees, a pioneer in outsourcing services where the CBE has significant shares. In 2018, the state policy bank, the Development Bank of Ethiopia (DBE), adopted a similar approach, establishing Ethio Capital Investment S.C. to oversee foreclosed assets and manage companies whose loans they defaulted. The Turkish joint venture companies, Ayka Addis Textile and Else Addis, are a few of these companies.

However, the labour crisis becomes more evident in areas that require particular skills, according to Tewodros Tassew, a financial technologies consultant. Steady technological advancement and the compliance demand make it difficult for financial institutions to keep up with ATM operations, said Tewodros.