As America’s top banks emerge from the Troubled Asset Relief Program (TARP) and the economy shows signs of recovery, Indian outsourcing vendors
Tata Consultancy Services, Infosys and Wipro are set to gain new offshoring projects worth around $1 billion over the next 1-2 years.
Among the firms seeking operational efficiencies by outsourcing non-core IT and back office projects to India are JP Morgan, Goldman Sachs and Morgan Stanley—which received approval to buy back government stake worth $68 billion earlier this year, as well as American Express, Bank of New York Mellon Corp and Capital One—which have started repaying government debt. Many of these banks had deferred new offshoring decisions as they attempted to cope with TARP funding requirements and internal restructuring processes.
Experts such as Andy Efstathiou , director of banking sourcing practice at research & consulting firm NelsonHall, said US banks are increasing offshoring. “Since the beginning of the economic crisis, many of these contracts have been put on hold. That is beginning to change. It is looking like Q4 of 2009 is shaping up to be a 20% growth over Q4 of 2008,” he told ET in an interview.
The US government’s decision to allow these banks to repay TARP funds also reflects a growing pressure to operate independently devoid of any political and public interference.
In a September survey of around 480 firms by Efstathiou, only 2% said they plan to reduce offshoring, while almost 37% said they will increase offshoring. “The financial services firms we have spoken to intend to increase spending on offshoring. Specifically, in a survey of firms we did in September 2009, only 2% expect to spend less on offshoring, the rest expect to spend the same (61%) or increase spending offshore (37%),” he added.
The merger of the banking systems of Bank of America and Merrill Lynch, among many other such deals, is creating newer opportunities for offshoring and outsourcing vendors.
Source: indiatimes.com
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