Following an investigation regarding concerns about the safety of customer data, the Financial Services Authority (FSA) has given offshore outsourcing in India a clean bill of health.
As part of its investigation, the UK’s main financial regulator visited and studied 10 outsourcing operations in India of companies who provided services to UK retail banks and insurance companies. After studying the respective governance and data control systems in place for the operations visited, the FSA said offshore outsourcing posed no greater risk to customer data than in-house operations.
The FSA did, however, say that the main risk identified was the complexity of achieving suitable management and control from a distance. However, the FSA believes that the appropriate governance frameworks, risk management items ms and controls can identify and mitigate operational risks from offshore outsourcing.
A recent report from Datamonitor points that firms are set to increasingly offshore mortgage processing, insurance underwriting, and claims processing to countries such as India, in addition to established functions such as call centres and application processing.