JPMorgan Chase to strengthen offshoring to India
http://news.webindia123.com/news/sho...1205&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.
