current Mphasis call center worker, said Mphasis Vice Chairman Jeroen Tas. He said the perpetrators may have persuaded bank customers to disclose their account passwords.
The Indian arrests come during a period of heightened anxiety about data security and identity theft.
In one of the latest examples, LexisNexis revealed that an intrusion into its Seisint databases may have compromised personal information on about 310,000 Americans, a tenfold increase on a previous estimate.
In 2003, the San Francisco Chronicle reported allegations that a woman in Pakistan doing clerical work for the University of California at San Francisco Medical Center had threatened to post patients' confidential files online unless she was paid more money.
But most of the criticism of so-called offshoring has focused on other matters, such as service quality and communication problems.
Data security at companies providing call center services offshore is indeed an issue, however, according to industry observers. Checking into the credit and criminal backgrounds of employees is not as reliable in India as it is in the United States, said Vail Dutto, chief executive of InTelegy, a California-based consulting firm. Among other services, InTelegy helps clients choose call center outsourcers in India. Dutto said Indian methods for tracking a person's past are not as mature as those in the United States, where an individual's misdeeds in one state are likely to turn up when the person applies for a job in another.
"What you did in Bangalore might not as easily follow you to Mumbai," Dutto said.
Mphasis' Tas agreed that checking the backgrounds of employees in India is more difficult than in the United States. "It is harder to track that," he said. But the background-checking process for call center employees and other BPO workers in India could improve, Tas said, thanks to plans by the country's National Association of Software and Service Companies, or Nasscom, to set up a national registry of BPO workers.
Another concern is employee attrition. Thanks partly to the perception that BPO work amounts to a dead-end job, attrition rates have been increasing in India. Higher turnover works against efforts by call center companies to run a tight ship, argues Forrester Research analyst McCarthy.
"Forrester expects that the rising attrition rates in the call center space--50 percent to 100 percent--undermine suppliers' ability to adhere to processes and sufficiently check backgrounds," McCarthy wrote in his report earlier this month.
McCarthy also suggested the Mphasis breach will seriously hurt the offshore BPO business. "Call center BPO growth could drop by as much as 30 percent," he wrote.
Tas called the Forrester report "sensational." He said Mphasis' annual turnover among BPO employees was in the range of 30 percent to 40 percent, and he said that level is not unusual for call centers worldwide.
In a statement made on April 13, Mphasis said it "highly values data protection and data security of its clients. It has proactively instituted
Insecurities over Indian outsourcing
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