Hundreds of UK companies have taken their own passage to India, lured by low cost, skilled workforces to run their call centres. The moves have been politically sensitive and highly controversial – resulting almost in a sense of vague corporate shame, offset only by the financial savings on offer.
Pressure had been mounting on firms to pull out of India as a result of bad reactions from customers but this is now increasing considerably following a series of scandals surrounding data theft and breaches of customer confidentiality. The Indian call centre industry is suddenly on the verge of a major crisis with UK firms caught in the middle.
The catalyst
The latest crisis was sparked by an edition of Channel 4’s Dispatches documentary series that exposed two call centre employees who it claimed were ready to sell customer details. One offered to sell a database with the credit card, passport and internet banking details of as many as 200,000 people, while the second offered to sell the personal details of customers of companies like Halifax, Bank of Scotland and Woolwich for as little as £5 each.
Damaging business prospects
While offshoring can boost the bottom line, it can also damage the long term appeal of a business by alienating and driving away existing and potential customers.
One of the most vocal and long standing opponents of offshoring has been Nationwide. According to its research, 91 per cent of people say it is important to them that their calls are handled from call centres based in the UK, while 84 per cent say they would be less likely to deal with a company if they knew it used call centres abroad.
“Increasing numbers of companies are finding that overseas call centres are not the answer,” says Nationwide’s executive director Stuart Bernau.
“While outsourcing overseas may save costs in the short term, by being based in the UK Nationwide experiences less employee turnover than call centres overseas and we believe our employees are more productive as well.
“Call centres are at the very heart of our service offering which is why we are committed to keeping ours in the UK where we have strong links with the communities in which we operate. Call centres abroad may suit some of our competitors but they are not the right option for Nationwide or for our customers. We recently opened our latest call centre in Wakefield and have been delighted with the level of service it has delivered.”
Alliance & Leicester has had a similar reaction from its customers. Its own research indicates that 51 per cent of consumers are concerned about the security of their personal information in offshore call centres and that 87 per cent of people in the UK would prefer not to have their financial services handled by overseas call centres.
Over half were concerned about the security of their personal information, while 47 per cent thought it led to a poorer service. That is remarkably conservative compared to the findings of a study by the International Financial Services District Glasgow which found that 80 per cent of customers say offshoring damages the brand.
Nearly half – 49 per cent – say they would consider switching their custom because of offshoring.
But still companies choose to make the move. Aviva, owner of Norwich Union, is outsourcing 1,000 jobs to India while cutting jobs in the UK, despite its own research confirming that customers are ‘overwhelmingly’ opposed to offshore call centres.
A study carried out on its behalf found that 51 per cent of customers are ‘appalled’ by call centres based abroad with India picked out for particular criticism. Respondents say that call centres in India are difficult to deal with because the staff lacked knowledge of Britain
Some respondents claim that they found staff hard to understand because of their accents, while others complain about the use of scripts and suggest that service could be improved by moving call centres back to Britain.
But to no avail – Aviva has chosen to overlook its own findings. “We have to ensure that we remain a highly efficient and effective company in what is an increasingly competitive and dynamic environment,” says Norwich Union’s executive chairman Patrick Snowball.
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Inevitably such exposures put firms on the back foot. “We have strict security measures in place and we are confident the people we employ and the procedures we use mean that information about our customers is not readily available to outside parties,” said a spokesman for Norwich Union, at the time.
"What you call a sting operation has actually tried to induce criminal activity and then make a show of it. It’s like creating a story and then printing it"
Kiran Karnik, president, Nasscom
Meanwhile a Barclays spokeswoman claimed: “None of the information acquired by the programme can be sourced to a banking call centre. In fact, it is standard information which has been culled from businesses who accept payments for goods and services by credit cards over the phone or the internet.”
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