Sending banking services offshore

The Financial Services Authority has released a report on its investigation into offshored financial services, warning companies that they are facing increasing levels of financial crime if they send processes offshore.

National Outsourcing Association Comments:

If companies have had their fingers burned through offshoring, then the likelihood is that they leapt on to the offshoring bandwagon without having the correct procedures in place. Offshoring does not mean "out of sight, out of mind" and saving money into the bargain. Often the ante on management procedures has to be upped in offshoring environments - this doesn't mean that organisations will not be able to realise cost savings. It is just that they may not be as much as first thought. Companies MUST have the right procedures and management structures in place. Offshoring should not be considered a short-term profit margin boosting solution - it should be a considered a medium - long-term business process with every eventuality well thought through.

* Business Continuity is vital: whether a process is outsourced or kept in-house, sent offshore of kept on-shore, business continuity is a core part of any business operation - employing a laissez faire approach to an offshored process is asking for trouble. Stringent management is a pre-requisite of any business process and ensuring you have back up procedures should things go wrong is tantamount to preventing disaster. In the case of an offshore process, a high degree of control of that process needs to be maintained in the on-shore location i.e. back in the UK - if anything goes wrong, processes can be pulled back on-shore with minimal fuss. Companies offshoring a process to a provider (rather than having their own "captive" operation in another destination) need to ensure the provider has a business continuity plan in place.

* Security - Indian workers are no less ethical than UK workers: media hype over offshore security breaches is generally unfounded. Companies often make the mistake that once a process is offshored, minimal management is needed, but this isn't the case - because of the distance, increased management is usually required. This ensures that company procedures are adhered to in every location, not only in Indian locations. India is in the process of formalising its equivalent of the Data Protection Act but in the meantime, Indian companies (and other offshore locations) are falling over themselves in a bid to demonstrate compliance - they are mindful of losing British business. Security breaches occur when a more lackadaisical approach is taken to management or whether you have employed an errant employee - this is as likely to happen in the UK as it is in any other destination

* Sky high attrition: call centres are invariably subject to high attrition levels no matter where they are located. Companies must focus on reducing this through good training, empowering staff, ensuring that staff have the right information to answer queries and complaints (number one bug bear is that staff are ill equipped with information to deal with queries) - these are areas that organisations should be trying to improve. When cultural differences come in to the equasion, these may be harder to address (Indian women not working after marriage) but organisations could start to deal with this by employing an equal gender ratio. Call centres should not be a short-term solution - if companies want to make them financially viable, they need to start investing in improving the longevity of employees' careers.

The NOA offers advice on best practice to any organisation thinking of outsourcing and offshoring and works in close conjunction with other industry bodies, trade unions and other associations to lobby government on best practice in these areas.