Offshoring but not outsourcing could be good for tech jobs
It's no secret that offshoring of IT functions within banks is on the rise in 2009, and the focus has understandably been on the implications of this on UK jobs. However, there's likely to be an increase in the use of captive centres rather than third-party firms, which could create a few career opportunities for savvy techies.
Eran Eisenberg, senior legal counsel at Barclays Bank, told delegates are the recent Financial Institutions BPO Across Europe: "I see a growth in captives - a lot of the larger outsourcing contracts have not achieved the benefits that were expected. That has driven forward a strategy of 'If we are going to make the investment, then we may as well invest in ourselves'."
There's also an increased focus on security, which is making banks slightly more wary of using a third-party, reckons Rajeena Brar, banking consultant at Pierre Audoin Consultants. They're predicting an increase the use of captives as a result.
The recent 1bn fraud case at Indian outsourcer Satyam is an example of where things can go array.
What's the difference, you might ask? The jobs are still likely to be shipped off to foreign lands at the expense of UK roles, regardless of whether the centre is attached to the bank or not.
Well, yes, but there's also another type of career opportunity, says Nigel Roxburgh, research director of the National Outsourcing Association.
"If a firm sets up a captive then there's always intermediary roles created onshore," he says. "You're acting as a customer interface and need to understand the software and technologies that have been outsourced. But rather than a purely technical role, it's more of a management role, and the right person can often be difficult to find."
The recent exception to this trend is when Citigroup sold its captive technology unit to Indian firm Tata Consultancy Services for $512m in January.
But even if the functions are given to a third-party, there's still a potential job opportunity, says Roxburgh.
"Taking your technical know-how and knowledge of the UK banking market, and using it to train people offshore is very valued. It could be a good launch point for a developer to move up the ladder."
