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Is it safe to outsource banking sector?

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  • Is it safe to outsource banking sector?

    I think banking sector is a very sensitive one as it deals with our money. But nowadays almost all banks (including public sector banks) started outsourcing their activities especially customer care operations. I wonder is it a wise decision to handover the sensitive details of customers to a private outsourcing firm.

    Quite recently a person lost huge money when an employee from outsourcing firm could compromise his sensitive data. It was a dead account and the employees who was taking care of dead accounts used it for his own benefit. He could even get a new ATM at his residence address after changing the contact details. He was under the impression that nobody will ever notice it as the account was dead for a number of years. In fact the account belonged to a deceased person but when his son returned from abroad and tried to take out cash the whole story became clear.

    It's too scary, isn't it?

  • #2
    Re: Is it safe to outsource banking sector?

    When outsourcing in banking area or any other area we can never outsource our core business or areas with sensitive information, that is just common sense. Not that the outsourced team is not trustworthy, but just in the case some problems happen, it's better that we deal with our core team, not an external one.

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    • #3
      Re: Is it safe to outsource banking sector?

      I am not sure on this one. If anything, I would just be very very transparent and require that the other parties involved do the same. I have just heard too many horror stories out there relating to having money "disappear" to trust anyone.

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      • #4
        Re: Is it safe to outsource banking sector?

        I used to work in a bank and I agree that it is a sensitive business in terms of confidentiality of information particularly with the names of big depositors and borrowers. Our bank was outsourcing but only on the lower level – from the janitorial and messengerial work up to supervisor level only. For managerial positions, there are consultants (as an outsource) but for a chosen few and only those highly recommended are taken in.

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        • #5
          Re: Is it safe to outsource banking sector?

          If we are talking about banks, insurance companies, anything in the financial area, IT and so on, it's always very complicate to outsource. I work in the IT area and we don't grant access just to anyone, because there is simply too much involved for someone to become administrator just like that.

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          • #6
            Re: Is it safe to outsource banking sector?

            Originally posted by to7update View Post
            If we are talking about banks, insurance companies, anything in the financial area, IT and so on, it's always very complicate to outsource. I work in the IT area and we don't grant access just to anyone, because there is simply too much involved for someone to become administrator just like that.
            Very true, these are all very sensitive areas to outsource. But nowadays companies hardly care about this and what these companies are looking for is ways and means to boost profit. They are not concerned about the security of customer data and its after effects.

            Even the largest public sector bank in our country has already outsourced customer care division to a private firm. Now the real threat is that this private firm can compromise this data for selfish interests. As already mentioned above there are a number of incidents where outsourced employees took advantage of the situation.

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            • #7
              Re: Is it safe to outsource banking sector?

              There are some functions in banking I would be very concerned about outsourcing, because of client confidentiality, PCI DSS requirements, legal oversight etc. The problem is that many of the basic functions are already outsourced and if there is an issue with the outsourcing firm a lot of customers' details are going to be compromised. Whatever happens, the bank would need comprehensive insurance to make sure their clients don't suffer in the event of a security failure.

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              • #8
                Re: Is it safe to outsource banking sector?

                If banks must outsource then it has to be on areas that are less sensitive devoid of customers details. There is the high risk of exposing customers sensitive information to untrusted hands if banks decide to outsource it's core administrative and financial areas. These third party companies may not be too mindful of the bank's reputation and integrity, besides they are not in the purview. It's fine to outsource jobs like messenger, security, cleaners these areas are not expose to customers details.

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                • #9
                  Re: Is it safe to outsource banking sector?

                  If you are asking as to whether it is 'safe' or not, banking outsourcing is much similar to investment banking in general. There are never 'safe bets', and things will always have some level of risk attached to them. Sometimes it is more. Sometimes it is less. Yet it is there.

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                  • #10
                    Re: Is it safe to outsource banking sector?

                    Originally posted by tpicks View Post
                    If banks must outsource then it has to be on areas that are less sensitive devoid of customers details. There is the high risk of exposing customers sensitive information to untrusted hands if banks decide to outsource it's core administrative and financial areas. These third party companies may not be too mindful of the bank's reputation and integrity, besides they are not in the purview. It's fine to outsource jobs like messenger, security, cleaners these areas are not expose to customers details.
                    But the real issue is that in banks there is hardly any field where customers are not dealt with. As banks are dealing with money almost all parts of the business are crucial and sensitive in nature. So I personally believe that it is not a good idea to outsource banking sector. When a bank handover the details to a third party they can use it in anyway and take advantage of the situation. We never know if these agencies are already doing it or not. As I said earlier there were many cases that came up lately where customer's private details are compromised.

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