As more US banking jobs move overseas, concerns rise about fraud and stolen records of personal accounts.
First, US textile jobs were shipped to the Orient, then customer service call centers for American companies cropped up in Manila. Now the back office of the corner bank is being hauled to Bombay and Bangladore, India.
From SunTrust in Atlanta to Bank of America in Charlotte, N.C., banks are hiring overseas shops to stay competitive, be more efficient, and have access to cheap labor.
But as more accounting and investment banking is being sent overseas, the result is that Americans' personal bank accounts are increasingly susceptible to theft and fraud, some experts say.
"If you think about the scenario, you have the lowest-paid contractors furthest away from the main office all with access to sensitive data," says Paul Bilden, vice president at Covelight, an Internet security company in Cary, N.C. "It's an incredibly risky proposition."
Outside of a Bank of America branch in Atlanta, customer Pete Johnson says he's surprised to learn that his bank is offshoring some of its processing work. He's concerned about an increased risk of fraud, and that workers a half a world away may eye his personal information. "It's an invasion of my privacy," he says. Still, for now he's not moving his accounts elsewhere, he says.
Other top banks such as JPMorgan Chase and Wachovia are also at the forefront of offshoring. Last month, JPMorgan Chase announced it expects to double the number of Indian employees to 9,000 people by next year. Currently, about 10 percent of employees of US banks work outside the country. This number is expected to rise to 20 percent - or 2 million people - by 2010, according to a recent Deloitte & Touche study.
"The new frontier is back-office processing done offshore," says Bob Olson, CEO of Dallas-based Carretek, a contractor that runs back-office shops for banks in India.