RBS glitch could lead to more tech jobs in nearshore locations
RBS’s technology debacle, which left millions without access to their cash for four days, has been blamed on a ‘junior operative’ in India. RBS is still shifting jobs out there, but the case highlights the risks of continued cost-cutting and offshoring in IT. The result could be more jobs closer to home.
Currently, the bank has around 60 IT vacancies in India for everything from its technology services division to markets and investment banking. There are around 20 open tech jobs in the UK, despite Stephen Hester saying yesterday that “the IT centre in Edinburgh is our main centre”. Unions have blamed outsourcing IT jobs as one of the main reasons behind the failure.
The cost savings of moving jobs out to India are obvious – financial technologists in the UK can earn £50-80k for development roles. In India, wages come in at £9-10k.
However, one of the problems with offshoring IT functions is that often language barriers can mean instructions get lost in translation, says Martyn Hart, chairman of the National Outsourcing Association. It’s increasingly common for code to be written in offshore locations, only for costly corrections to be carried out at a later stage.
More jobs could be coming to nearshore locations like Belfast, Scotland, Dublin and Bournemouth, he suggests.
“Banks are under financial pressure and offshoring non-core IT functions is an easy way to cut costs,” he says. “However, there has to be a balance between economies of scale and the need for better communication and higher quality work. We’re close to a point now where some of the more skilled development work needs to be carried out in the UK, even if it’s nearshored.”
The RBS failure was down to a problem with an upgrade to its batch software, CA-7, according to reports. It’s a problem that should and could have been dealt with as a “trivial matter” for experienced staff, but wasn’t. The case “tends to imply that the criticisms of the policy to ‘offshore’ also hold water”, one ex-RBS employee told The Register.
