Just another routine day, with Reuters and Fidelity adding their names to the list of those who 'may' set up shop in India. Meantime back in the US new unemployment signings take another surprise jump this week.
Outsourcing of back-office financial work to India is to get another boost with two major international names, Reuters and Fidelity, deciding to start operations in Bangalore. Reuters have made no formal announcement in this regard but have reportedly started making real estate enquiries in the city. Fidelity has already begun recruitments and has located its CEO.
The British news agency turned financial information services company, going by its conservative nature, appears to be initially planning to recruit around 200 people. Indications are that this will be scaled up to 1,000 in two years’ time. Sources say the initial outsourced work will not be “core” operations which would have implied news and advanced analytics but corporate information work, something of a little higher order than data entry. However, an expert who has been closely observing the ramp up pattern of BPO operations is Bangalore feels confident that both the scale and nature of work handled will undergo a rapid change as the company finds how well the work is going.
He feels that the pattern of recruitment will quickly shift, after the initial stage, to financial journalists, CAs and MBAs. Fidelity is coming in with not one but two operations: 1) software services and 2) back office work for Fidelity Employee Services Co (FESCo), US, which currently provides a range of HR services to 11 million employees through administration of 11,000 programms for retirement, pension, health and payroll services. It is expected that the latter part of the work will ramp up quickly with financial and risk analysis service being offered to clients out of Bangalore.
Reuters and Fidelity will be strengthening a trend which has already begun. Earlier in the year, investment bank JP Morgan Chase announced plans to set up an offshore equities research unit in Mumbai. Its initial hiring target for the current year was 40 junior analysts and support staff. Capital One, a leading US credit card issuer, is in the process of setting up a risk management center after earlier shifting back office work to one third party service provider and entrusting work to another on a BOT basis. Eventually Capital One will take over the latter operation. There are several established captive BPO operations of financial services firms in Bangalore, most prominently led by HSBC which does support, call center and back office work. Indigo, a subsidiary of Unilever, does high end processing work out of the city. PWC, now part of IBM, falls in another category. It has set up third party operations for back office processing of financial work in the city.
Source: Business Standard India