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Moumita Bakshi

LOOK closely, and you may see the BPO industry wince in pain. Even as an expert committee constituted by the Government gives finishing touches to its recommendations on review of the Information Technology Act 2000, and also mulls suitable legislation for data privacy and protection, comes the recent arrest of four former employees of Mphasis BFL's BPO operation. They have been arrested on charges of duping certain account holders based in New York. All this throws the spotlight back on data security in the context of the Indian BPO industry. The four ex-employees of MsourcE were arrested by the cyber crime cell of the Pune Police for illegally transferring close to $300,000 from accounts of customers of a New York Bank. While staying tight-lipped on the identity of the client, Mphasis-BFL issued a statement saying it was in close contact and working with the Police, and that it regretted the occurrence.

The industry, on the other hand, termed the incident as `unfortunate and regrettable' but was quick to point out that such incidents involving account thefts were not specific to only the Indian market. "It happens worldwide and this incident is surely not the first. It is, nonetheless, regrettable. One must realise that despite the complex and detailed fraud tracking units that monitor spending trends and frauds, if a bunch of employees collude and indulge in wrongful activities, it becomes extremely hard to stop it. Its do-able but also easily traceable," says Pramod Bhasin, President and CEO of GECIS.

In the same breath, he admits that the industry has to strive for the highest level of vigilance "because the world is watching us."

Says Raman Roy, President and CEO, Wipro Spectramind, "These issues occur in markets other than India as well. Take, for instance, the US. What has happened is unfortunate but the incident has demonstrated that there exists a mechanism to discover such account thefts and take action against them. It has demonstrated the capability of Indian authorities and companies to respond promptly to such situations."

However, Roy highlights the importance of having strong legislation on data protection and privacy, saying it will not only help expedite action taken in case of violation but also provide a further comfort factor to BPO companies and their clients. "As long as processes are in place to discourage employees from indulging in such activities, clients will not get nervous," he says.

But there are players who see the incident as an early warning signal for the industry. According to Navanit, Chief Operating Officer of Epicenter Technologies Ltd, "It is the worst thing to happen to the industry, and it would arm the detractors of offshoring with enough ammunition to question the logic of moving BPO work to India. This particular case will give rise to more fears on offshoring, and we have to convince them of our ability to handle data security issues."

Ravindra Datar, Principal Analyst, Gartner India, says this episode is bound to once again highlight data security as one of the major concerns among US clients for BPO projects, especially in the financial services and telecom verticals.

In customer care and support functions, he says, changes will have to be immediately introduced in two key areas to reduce the concerns of clients. One, in screening candidates, background checks will have to be strengthened and psychoanalytical tests conducted to assign the right candidates for sensitive tasks.

Two, greater security will have to be established in terms of banning writing instruments and use of mobile phones in sensitive areas. Besides this, use of keypad functions for entering PIN numbers for credit card access or other technological innovation will have to be introduced by all contact centres, he says.

Research firm Forrester has warned of a possible 30 per cent dip in call centre BPO growth as a result of the account theft incident. "Forrester believes that the incident will undermine call centre expansion by as much as 30 per cent as security concerns, regulatory pressure, and end-customer backlash lengthen sales cycles, impede the ramping up of larger projects, or drive firms to take the captive route.

The security breach will also hasten the shift from call centre customer service work to less onerous and visible back-office accounting and claims-processing activities," it says. India will have to tighten its data protection and privacy laws to bolster its offshore credibility.

Terming the case an "organised and systematic plot to steal customers' money", Forrester cautions that the breach, along with recent onshore disclosures of sensitive customer data, will have far-reaching negative connotations for the offshore BPO space.

With the industry clearly divided in its opinion on the long-term implications of the incident on the fortunes of the currently thriving Indian BPO companies, what remains to be seen is whether the global clients dismiss it as a one-off case or the episode unleashes a fresh round of BPO backlash.

moumita@thehindu.co.in

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