According to an article in today's NYT: From 2003 to 2004, Deloitte Research found in a survey of 43 financial institutions in 7 countries, including 13 of the top 25 by market capitalization, financial institutions in North America and Europe increased jobs offshore to an average of 1,500 each from an average of 300. The Deloitte study said that about 80 percent of this went to India.
Why India? Said one analyst, "With its vast English-speaking, technically well-trained labor pool and its low-cost advantages, India is one of the few countries that can handle the level of offshoring that U.S. financial companies want to scale to."
One reason is the cost of living and wage differential between labor here and there: in 2003 the average M.B.A. working in the financial services industry in India, where the cost of living is about 30 percent less than in the United States, earned 14 percent of his American counterpart's wages. Information technology professionals earned 13 percent, while call center workers who provide customer support and telemarketing services earned 7 percent of their American counterparts' salaries.
But labor costs are not the only issue: Global financial institutions are moving work overseas to spread risks and to offer their customers service 24 hours a day.
What do you think? Read the whole article at: The New York Times > Business > World Business > Financial Firms Hasten Their Move to Outsourcing