Offshoring of Bank IT Jobs Looks Likely to Rise in 2009

[OhioChick]

January 05, 2009

"Offshoring" is a word feared by financial technologists, increasingly with good reason. According to Jerry Luftman, lead researcher of the Chicago-based Society for Information Management (SIM), "offshoring" has become the favorite buzzword of today's bank CIO, replacing "reengineering" from 10 years ago. (For IT staff, either can amount to being laid off.)

Having crunched SIM's latest survey numbers, released in November, Luftman has reversed an earlier assertion that "Offshoring is greatly exaggerated." SIM's June survey of its 3,600 CTO/CIO members, one in six of whom are in financial services, asked participants how much of their IT budgets they planned to allocate to offshoring. "It's increasing from 4 percent to 5.6 percent," reports Luftman, "which is a big jump, considering it's been flat for about six years and was, in fact, down last year."

This confirms what BS&T has been hearing frequently from bankers and vendors: Offshoring and outsourcing are on the rise -- as one might expect when there's an acute need to cut costs. However, as reported in last month's issue, there are those who predict that the new presidential administration might limit offshoring practices, as President-elect Barack Obama promised during his election campaign.

There's also some debate as to what is even meant by "offshoring." Luftman, who is also a professor at and executive director of the Stevens Institute of Technology in Hoboken, N.J., says "offshoring" typically refers to a company employing its own staff overseas, as opposed to "offshore outsourcing," in which the company uses third-party services abroad. According to Luftman, this has emerged as "pretty accepted" terminology.

More: http://www.banktech.com/news/showArticle.jhtml?articleID=212700672&cid=RSSfeed_BankTech_News

[Double T]

1. Isn't that WHY we bailed their miserable wretched ass out inevitable collapse and bankruptcy?

I'm sure glad the American Taxpayer and The Treasury sustained these corrupt financial institutions so they can provide our former jobs to slave wage workers in other nations. And just in case you're wondering, we're ALL a bunch of idiotic fools.

[OhioChick]

4. I'm so glad that my taxpayer dollars

Are being spent to send jobs that Americans are more than qualified to do overseas. :sarcasm:

[Azlady]

2. I'm so hoping

that after jan 20th, these banks will either have to either keep OUR jobs here OR give back OUR money! Let Walmart bail their asses out!

[deadmessengers]

3. Not incredibly surprising

I spoke at a financial industry IT conference on the subject of data security last June. One slide from my hour-long presentation covered maintaining data security when offshoring work. Although it was a very small piece of the overall presentation, 90% of the questions I received were on that subject - IT managers and executives in the financial industry are obviously in the position where they have to think about this stuff a LOT, as more and more IT jobs are moved abroad.