elaborate systems which are constantly reviewed, to ensure and protect client confidentiality."
Among its rules, Tas said, are that cell phones aren't allowed in call centers, given the ability of some of them to take pictures. In addition, between 2 percent and 5 percent of calls are monitored at Mphasis BPO facilities. This is consistent with the norms in the industry, according to the company.
Tas said the alleged fraud is not a sign of security problems specific to shipping call center work overseas. "We believe this is something that can happen anywhere," he said.
But losing control of sensitive data abroad is particularly worrisome, argues Peter Gregory, chief security strategist at consulting firm VantagePoint Security.
"Outsourcing America's corporate business processes to overseas countries not only makes accountability difficult to enforce, but it puts our national sovereignty at risk," Gregory said in a statement. "In this, the Information Age, a country like India could disconnect itself from the Internet and hold America hostage--a provocative action that would be tantamount to an act of war."
In its report earlier this month, Gartner offered a much less grave assessment. The idea that offshore business process outsourcing presents special risks is a "largely incorrect perception," the firm said.
But Gartner and others seem concerned the perception alone could torpedo the industry. In a statement earlier this month, Mphasis appeared to acknowledge the fraud could have a potentially large impact on India's BPO industry.
"We have instituted our own internal inquiry and taken necessary short-term and long-term measures in consultation with Nasscom and the bank concerned, to protect our clients and their customers, and safeguard the security and integrity of the BPO business in India," an Mphasis representative said in the statement.
Some see a silver lining for offshoring in the fraud case. Tas said the response by police in India shows that the system of laws and law enforcement in India "works well, and it works swiftly."
"India is fast becoming the outsourcing capital of the world, and this kind of incident, while unfortunate in itself, when successfully dealt with, highlights and reaffirms the existence of an effective framework of laws and a commitment to enforcing them in India," Nasscom President Kiran Karnik said in a statement.
Nasscom has set up an Indo-U.S. security forum to make its members aware of security and privacy issues when they handle sensitive information from foreign companies. Nasscom also recently launched a security initiative in Pune with local IT companies and police.
Insecurities over Indian outsourcing
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