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Aug 08, 2012, 08.08 PM IST
Global banks that ship increasingly sensitive and sophisticated work overseas to save costs will be forced to step up oversight of back office operations after industry scandals point to lapses involving offshore units in India.
What started a decade ago as call centres staffed by young Indians faking western accents to sell credit cards and field routine queries has grown into a core function for banks, handling work from risk and fraud management to finance and accounting.
The New York state banking regulator's accusation this week that London-based Standard Chartered
"When you offshore, the biggest challenge is not at the offshore end but it's on the onshore-end and the management of the offshore operations. And these companies are underinvested in that," said Bundeep Singh Rangar, chairman, London-based IndusView Advisors.
"If they don't put (in) enough oversight, governance procedures and practices, then you will have a problem with the satellite centre, whether that is located onshore or offshore," said Rangar, whose firm advises foreign companies, including technology firms, on doing business in India.
Drawn by an English-speaking population and wages that can be one-fifth those in the West, more than three-quarters of global banks have a direct or third-party offshore presence in India.
Bank of America Merrill Lynch
Financial firms such as Citigroup
Tags: Global banks , back-office operations, industry scandals , fraud management, Standard Chartered, Chennai
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