Outsourcing of jobs will spark crisis in Britain: Experts Hindustan Times (3/39)
Outsourcing call centre jobs to India has become a major concern for unions in the UK. Now analysts and data protection specialists warn that the "off shoring" is an accident waiting to happen for the UK's financial services industry.
Eamonn Rice, head of financial services Ernst & Young predicts the trend will "inevitably" spark a regulatory crisis at one of the banks or financial services firms that is off shoring call centre or business processing work, which, in turn, will prompt a major rethink of the off shoring phenomenon.
He said: "Given the volume of off shoring that is going on and the risks attached, there will have been a major regulatory failing within five years. The FSA will be keen to respond appropriately, coming down pretty hard on any organisation that allows the carrot of reduced costs to outweigh the regulatory and risk management stick."
"Financial services companies can never be entirely sure that off shore workers are up to speed on UK regulatory requirements. It will be a disaster for the financial services brand involved."
Amid reports that criminal gangs have been trying to bribe employees in Indian call centres to help them commit fraud against customers, Rice said the scandal is likely to involve a failure to handle complaints properly, a breach of confidentiality or mis-selling.
It is also believed that more than half the UK firms that are exporting call centre work to India are understood to be flouting the Data Protection Act, which put them at the risk of unlimited fines, being sued by customers, leading to further harm to their reputation. Information commissioner Richard Thomas has warned that companies would not be able to escape the law by blaming failures on the act’s complexity
Ha Ha, those silly Brits! That sort of stuff could never happen to good old American companies because they have your best interests at heart... don't they?
Rice calls the spate of companies rushing to India as being "cyclical". He said, "We're in a part of the cycle right now when the attractions seem huge. Two things will convince people that actually some of this stuff is better done in the UK. Those will be pressure from customers to bring jobs back onshore as they recognise that service levels are lower, and the potential for regulatory failure. That will create doubt in the minds of UK executives which can only be eradicated by bringing stuff back onshore into a UK regulated environment."
Capital One, the credit card firm, has recently cancelled a deal with India’s largest call centre after Indian workers misled the US card company’s customers with unauthorised offers of credit. Lehman Brothers and Dell have both taken back services to the US following customer dissatisfaction at poor service.
Uh oh, better check that Capital One care, 'cuz we never heard that one!