Chase to strengthen offshoring to India

[info]

JPMorgan Chase to strengthen offshoring to India
http://news.webindia123.com/news/showdetails.asp?id=181952&n_date=20051205&cat=World

In yet another instance of international businesses 
moving operations to India,  American banking giant 
JPMorgan Chase plans to hire 4,500 staff in India over 
the next two years with an aim to move 30 per cent of 
its back office and support staff at its investment 
bank offshore by the end of 2007. 

The plans are being seen as the most ambitious move 
till date by an international investment bank to take 
advantage of the low cost of highly educated staff in India. 

The bulk of the bank's processing of foreign exchange 
trades will be  carried out at its centres in Mumbai 
and Bangalore. It is also moving over much of the 
processing of credit derivatives contracts, an area 
where the US and the UK regulators have expressed 
concern about backlogs  across the industry. 

Other investment banks are also planning to move operations 
to India and Stefan Spohr, of consultants AT Kearney,  
estimates that the US and UK-based investment banks now 
have about 6,000 staff in India, of which half are directly 
employed, representing less than 5 per cent of their total headcount. 

However, he predicts this could rise to as much as 
20 per cent in the next few years. 

''This is not a trend that will go away. Global resourcing 
is becoming part of the way of doing business,'' he said. 
Industry analysts have been quoted saying that salaries in 
India are 70-80 per cent lower and total costs about 40 per 
cent below US levels. 

''The quality of the people we hire is extraordinary 
and their level of loyalty to the company unbeatable,'' 
Veronique Weill, head of operations at JPMorgan's investment 
bank was quoted as saying by the Financial Times.

JPMorgan is also seeking to tap talent that it can use 
elsewhere in the group and some of those hired for the 
new operations have already been transferred to the US. 

The expansion in India is backed by Jamie Dimon, 
JPMorgan's famously cost-conscious chief executive 
designate, who recently visited the Mumbai facility, 
the paper reported.

JPMorgan, which had only 200 offshoring staff in 
India two years ago, is currently hiring between 
300 and 400 graduates a month and plans a total of 
9,000 by the end of 2007. Some 3,000 will be working for 
the investment bank with the rest supporting the group's 
retail and commercial banking operations, including 
2,000 call centre workers.