By Andy McCue, 12 January 2004 15:00
NEWS The Indian offshoring backlash has begun, with major 'British and proud of it' financial institutions declaring they won't move call centres abroad.
Nationwide, which is seen as a technology innovator in banking circles, is one of the first to nail its colours to the mast, with CEO Philip Williamson claiming there are too many risks associated with moving call centres to offshore locations such as India.
Williamson said the company will instead invest in its UK call centre operations because of its ties to local communities, the service they can offer and concerns over offshore data protection for consumers.
"Nationwide is a mutual with strong links to the communities in which we operate, and we have no plans to desert these local communities in favour of overseas call centres," he said in a statement. "Call centres abroad may suit some of our competitors, but they are not the right option for Nationwide and we are aware of some commentators' concerns that some countries may not have the same level of data protection for consumers that exists in the UK."
Nationwide will open a new call centre in Sheffield, along with investment in the major refurbishment of existing call centres in Swindon and Northampton, which employ around 800 people.
In an interview with the FT, Northern Rock COO David Baker said his organisation's ties to the community are more than just sentimentality.
"For us, the cost savings of moving to India would be relatively modest compared with the risk of not being able to control these operations," he told the paper.
Back in December, Steve Morrell, principal analyst at ContactBabel, warned of a customer backlash against firms who move jobs to India resulting in a trend of 'British and proud of it' companies trying to take advantage.
He said that the moves by Nationwide and Northern Rock are the first signs that this backlash has begun.
"This is the first of many. There is plenty of political capital to be gained as there is a big groundswell of public opinion, and Nationwide is gambling on this," he told silicon.com. "It will be interesting to see over the next year how these 'British and proud of it' companies will do compared to the likes of Lloyds TSB."
Recent research by ContactBabel showed that while Indian call centre agents work faster than their UK peers, UK workers deal with 25 per cent more calls each hour and resolve 17 per cent more first time.
Comments
There are 39 comments. Join the discussion
1. Dave S
Great! - and about time too. They will certainly get my custom.
I was a holder of a TSB credit card until they announced the closure of a call centre based in Newcastle upon Tyne. Lloyds TSB has now promised to find jobs for all the affected workers within their other operations (but it's still moving the call centre jobs to India). Surely similar customer actions caused the rethink. I'm thinking of similar action against Barclays following recent announcements from them.
Interesting that Northern Rock (with their head office in Newcastle) are claiming to have ties to the community - last year they announced the closure of several network branches in the North East, and in areas where local people had no other access to their services. They can't have it both ways. Some of the closed branches are to be reopened by another locally based financial institution - a MUTUAL building society. You could argue it serves the customers right that they sold out to allow a financial gain when they voted for Northern Rock's flotation. Perhaps there is really an underlying demand for mutual institutions - bear that in mind when Standard Life promise you riches beyond your dreams.
Don't forget, the cost savings achieved by moving jobs abroad will mainly go towards the bonus payments of CEOs etc. The redundant worker's unemployment benefits will be paid by YOU, the taxpayer.
I should also mention that I too lost my job several years ago when a multinational decided they could make things cheaper abroad - there is more to economics than basic selling price.
2. Tony Nicholson
I would have thought that within the EU or British banking regulations it was illegal for companies in countries outside of Europe to have access to sensitive personal information. The possibilities for fraud are enormous
3. Mike Barrett
At last a company not just interested in the short term bottom line, but in the continuance and expansion of the service industry in the UK.
Ultimately it is a false economy for the large companies to shed their local workforce and exploit other contries where the labour costs are cheaper as eventually there will be nobody employed in the UK to buy their services.
4. Steve Cheek
I applaud Nationwides decision, and will be looking at Nationwide products to transfer to, following Lloyds TSB decision to outsource to India.
5. Koby Amedume
I have to say that having experienced appalling service from call centres based in India (through my ISP, Credit card company and Dell corporation) I will be inclined to deal with companies with UK base call centres. This is not jingoist, merely the fact that the quality controls are far better.
6. Andrew Rice
Under the DPA, is it legal to export customer data to India without the owners consent as it is to the US?
7. anonymous
About time ! Why should UK companies make money at the expense of the UK workforce. Having experience several calls from Indian call centres, they read from scripts and can not understand you when you divert away from it. Language differences does prove to be a problem. Not their fault but their greedy employers.
8. Alex Geddes
About time - why would I or anyone want my personal information and financial matters offshore. The security implications of moving offshore have not been thought though. Will offsore access to data pass ISO 17799/ BS 7790 criteria?
9. anonymous
Citibank operator: "BT? Who's BT?". Honestly. I'm leaving.
10. J Mancz
Good on Nationwide!
I hear from a colleague in the US that there is the potential for legislation to be introduced which would force all Call Centres to announce to callers where the call is being answered.
Great idea -- it gives the customer the information needed to decide whether to continue their relationship with the institution.
11. anonymous
We've opened a Nationwide account and will be closing our LloydsTSB account
12. anonymous
We've opened a Nationwide account and will be closing our LloydsTSB account
13. Brian Burkill
I for one will now be switching to Nationwide for my banking, in support of this gesture..
Will others be following suit.. Send out a warning to the banking community.. Stay British or we leave.
14. Jason Troubridge
At last common sense as prevailed and we British can be sure that at least some UK companies have our consumer interests and job security at heart...Why cant those other companies such as Dyson and Norwich Union also see sense, but still as long as us Brits boycott those companies that moved work elsewhere then they will so get the message where it hurts most,,,in the pocket... Well done Nationwide I am proud to be one of your customers !!!!
15. Karen Challinor
Good, now how about some legislation so that you can't offshore the workforce unless you offshore the management too
16. anonymous
The US benefited from outsourcing to India and other countries for over 20 years, with gains of up to 40%. Capitalism makes things happen for higher profits, British banks will soon remember why they outsourced these operations in the first place.
17. anonymous
I hear that India has very good accountants and managers, so how about offshoring those jobs...how silly of me.
18. John Lewis
Good for Nationwide. Can we have a list of like minded organisations to ensure they get our full support?
19. gary c
Brilliant - Well Done Nationwide. You are about to receive my business. I truly believe you will benefit from such a policy. It is a breath of fresh air to finally hear a policy that is made to the benefit of the customer.
20. Pete L
*Round of applause*
My banking institution still uses a UK callcenter so I wont be opening a Nationwide account, however I now know who to go to should that situation change.
21. Bob
Why is that if a 'Third World country' is able to challenge the 'first world', on level terms, they are frightened. Surely, its right to share wealth and prosperity, or is it that the underlying greed is finally being shown in the mirror?
22. Don Tregartha
In addition to the Nationwide, the Co-op bank and Intelligent finance don't use offshore call centres. Lloyds TSB do and they say:
"We are proud to have a diverse workforce, both in the UK and overseas. We don't believe that geographical location, race or gender make any difference to the service you receive."
It is said that you are twice as likely to have a divorce than change your bank account. Thats what these fat cats are 'banking' on - it's time we showed them the door.
23. anonymous
Sounds like turkeys voting against Christmas - the UK IT industry has got to wake up to the fact that we in the UK have no "divine right" to work. We've got to be faster and sharper and better than the competition if we want to keep our jobs. Nationwide may see temporary marketing advantage in this, but let's see what their shareholders say if they can no longer compete on cost...
24. John
RE: Sounds like turkeys voting against Christmas
But then the Nationwide only has it's members to keep happy and not additional shareholders! It's not about "divine right to work", it's about the effects of two highly disparate economies being in such close contact through the use of technology and core industries being offloaded to the cheaper one. Members of the more expensive economy will suffer and understandably be pretty hacked off about it.
I'm pretty much of a capitalist mentality, but even so I don't believe that industry should simply do whatever it wishes to make money. Otherwise, most business men will follow simple human nature and do whatever they can to line their own pockets in the immediate future and stuff the long term future of the populace at large.
25. John
I'll be investigating a Nationwide account PDQ. I've been meaning to do it for some time anyway, as I've always admired their stand against the carpetbaggers. I haven't been too impressed in those dealings I've had with Indian call centres so far, either they aren't up to the job, or they are so bound by rules and regulations that even with the best will in the world they can't go that extra step required to sort out tricky issues.
26. Martin
I don't care where they are, I hate dealing with call centres!
27. Ron Thompson
Well done Nationwide I know from the bad experiences I have had with BT it just does not work. There is a language problem we don't understand each other's dialects.
28. Amrit Hallan
How convenient! Well, I've posted my response at http://www.quality-writing.com/ir/archives/000144.html
29. Anon
I recently made an enquiry regarding my HSBC card. The person dealing with my request was located in an Indian call centre (I asked during the call), I have to say, I found it very difficult to understand what was being said and I do suspect that the process took longer due to this problem.
I already have a Nationwide account. I will be cancelling my HSBC card and using Nationwide's instead.
30. anonymous
without any prejudice, but I have great fear in the 'Ethic's of offshoure outsourcing', Asia has never really endeared itself to be a stable place, to go place sensitive information, with the persistent threat of Nuclear war between Pakistan and India, and the known level of Bribery and corruption that exists with these asian countries, only a fool would think it is a wise decision to go place lucrative information in the hands of third world gangs!! To allow software to be produced in "Sweat shops", by third world programmers, will only result in NIKE software, looks good on the Shelf, Attractive packaging, quality is crap!!
31. anonymous
There should be a name and shame list of companies who do this and yet claim to be British. Then at least people can make up there own mind.
Personally I'd vote with my feet and move my bank account, savings, morgage, electricity, gas, etc if I knew this was the case.
32. Glenn Brown
The anonymous respondee that claimed the Nationwide's shareholders would not be impressed clearly missed the point. The Nationwide is a mutual society and has no traditional shareholders, who's only interest is in profit! Mutuals have a more socially conscience minded members and as I one I applaude their stance. If me losing 0.25% return means UK people not losing their jobs so be it! Someone elses job loss today may be yours tomorrow!
33. Rebecca Blott
I think that off-shoring is disgraceful!
These organisations obviously have a complete disregard for their customers and only care about the short term bottom line.
British workers have few enough employment rights without facing the devestating impact of whole communities being put out of work. You have to ask yourself who will be picking up the unemployment tab?
I would be interested to know if anyone has heard of a website that's been launched in support of British labour.
34. Rebecca Blott
The comments made by Amrit Hallan on his web site are extremely racist. To claim that the average British investor and customer are not very educated and that Indians are somehow superior is infuriating. I myself am an investor and customer. I am educated with an Electrical Engineering degree and I certainly do not wish to receive support from a call centre based outside of England.
Apart from the security concerns, what's wrong with wanting to hear an English accent at the end of the line when you call for customer support? Why should you have to grapple with a language barrier?
Why should we have to compromise?
We as a nation should support our own workers. Their job losses can have an impact on the whole UK economy.
35. L.Jones
Dont like all my eggs in one basket.
Gonna make an exception here. new CCC coming up.
36. Pauline McCulloch
Well done, Nationwide. I am about to transfer my savings from Lloyds TSB and Abbey in protest, and have been looking for a "safe" and competent alternative.You are now top of my list. I have also cancelled some of my storecards, as they really seem to be "losing the plot."
37. David S
Perhaps they should reconsider. Can anything be worse than the service recently on offer from the Swindon call centre?
It has just taken me 25 minutes to get through on behalf of my 95 year old mother. When she called last week she took 30 minutes to get through and described getting to talk to the right person as a "bit of a rigmarole". Even then they couldn't confirm whether they had posted a cheque or not as requested from her postal account.
When I got through, for Data Protection reasons, they would not answer a simple question - they had to talk to the account holder - even though I had all her account and usual security question details.
At least I got them to phone her, rather than her having to endure the trials of getting through to them again, but their security question to her was: "what is the balance in your account". Since she doesn't keep her financial paperwork by the phone and in any case wanted to check the account balance to make sure they had not deducted the amount twice after sending a duplicate cheque (which they had!), it somewhat defeated the purpose.
It's not the first time she's had problems on simple service matters. As she say "they don't reply to letters, so you're forced to use the other methods". The call centre on one occassion asked her to "pop into her local branch" which is a difficult 40 mile round trip on public transport!
I trade globally using ecommerce with little problem. So to me it doesn't matter where the service comes from - as long as its responsive and good.
38. Paul Robinson
We're moving our account from HSBC to Nationwide as our card was swallowed by an ATM over three months ago, the call centre in india keep asking for the card number then refer us to our branch who in turn refer us back to the call centre. Indian call centre worker 3k p.a British call centre worker 16k p.a. they never under estimate the value of local knowledge but sadly fail to recognise the value of local service. Bye Bye HSBC
39. anonymous
Good on the nationwide, will move my accounts from lloyds/tsb a.s.a.p. now with the R A C outsourcing to india i just need a new breakdown company.