ANZ says it is going to trial the use of foreign staff to call Australian customers as part of its debt collection division.

Until now, the bank has limited so-called offshoring to back office roles, but it is now undertaking a pilot program with 100 staff based in Manila in the Phillipines who will make some early stage debt collection phone calls.

The bank says the 100 jobs are not being cut from Australia, and will be in addition to the 800 employees it already has in Melbourne doing debt collections.

ANZ says it is trialling overseas staff because it is difficult to attract and retain local staff in the debt collections area, partly due to the emotional and stressful nature of the work.

The bank's spokesman, Paul Edwards, says a rise in bad debts also meant it needed to find more people to handle collections.

"The decision is primarily driven by the recent uptick we've seen in loan arrears, particularly on mortgages and unsecured lending," he told ABC News.

The bank reported a modest rise in bad debts in its most recent update to investors and, with most economists still expecting interest rates to go higher rather than lower, banking analysts say it is likely bad debts will continue growing.

The chief executive of ANZ's Australian operations, Philip Chronican, says he does not expect a fall in customer service standards.

“What I have seen in Manila is very good English language skills, a strong service culture and highly capable staff who want to make a career in collections work and so it’s natural that we should now look at how this could supplement the capability we have in Australia," he noted in a statement.

"The pilot gives us some additional capability in collections and I’m pleased we have been able to do this without any loss of jobs."

The bank has not guaranteed that other jobs will not be outsourced in the future.