US subprime loss set to spell windfall for BPOs (India)

5 Dec, 2007
NEW DELHI: The sub-prime crisis in the US may turn into a windfall for India’s outsourcing industry. According to consultants and BPO insiders, the new lending laws, being worked out in the US, will significantly increase outsourcing by American banks to India. These new laws will be fairly stringent and will require greater outsourcing as lowering costs assumes prime importance. All of which will be a huge opportunity for Indian BPO and IT companies which already have some of America’s top banks as clients.

Said Stephen J Rohleder, chief operating officer, Accenture, “Because of the sub-prime crisis, there will be a litany of regulations for loans in the US. So, that may be an area that will be industrialised, systematised, and outsourced to companies in India. It’s an area of opportunity in the near future.”

The pressure to cut costs has mounted in the US following the sub-prime lending crisis and Indian companies are the best equipped to capitalise on that, say players. “Earlier, high cost-pressure in the US used to drive greater outsourcing to India. With the commoditisation of the applications work, it led to some leakage to other locations. With Indian IT companies offering both infrastructure and application services, such work can only come to India where companies have expertise,” said HCL Technologies CEO Vineet Nayar.

Over 40% of India’s $8-billion business process outsourcing firms’ revenue comes from the banking, financial services, and insurance (BFSI) sector. About 20-50% of top BPO firm revenues come from this sector. Not only do Indian outsourcing firms provide services to the biggest US banks, global banking firms like Citibank, Bank of America and American Express have their captive centres in India to support their functions.

A report by offshoring consultancy TPI said that even if the US economy slips into a recession, American companies presumably would be even more inclined to look for services in low-cost locations.

http://economictimes.indiatimes.com/Infotech/US_subprime_loss_set_to_spell_windfall_for_BPOs/articleshow/2595956.cms

The only "Good Thing" about the falling dollar is that the Chinese prisoners will start to get some price completion from American workers.

we spend the money in iraq -- we outsource money to over seas -- we locate off shore banks -- etc.

that money NEEDS to stay here -- to work on american jobs, entrepreneuers, schools, etc.

in other words we need to return to pre-reagan well regulated society.