Call center security breach

TEXT OF COMMENTARY

SCOTT JAGOW: If you've called customer service lately, you know a lot of companies have call centers in India. A lot of banks have started doing this in fact. One of them, HSBC, said today, an employee was arrested for handing over people's bank information to thieves.Those thieves stole $400,000 from 16 HSBC customers in Britain. This case is certainly raising some questions about security at India's call centers. David Wells is with the Financial Times. Good morning, David.

DAVID WELLS: Hello.

SCOTT JAGOW: Is this an isolated incident or do we have a growing problem here?

DAVID WELLS: A little bit of both actually. It's isolated in the sense that it doesn't happen as often as it sometimes seems in the press when it gets reported, and it happens all over the world, not just in India. It's important because of the fact that it is India where call center business has grown considerably and where increasingly retail banks are hiring people to do the number business for them.

SCOTT JAGOW: But it sounds like there's a specific security issue going on with these call centers in India?

DAVID WELLS: Right the issue with the call centers in India is, it's a couple of things. One is that there's intense competition amongst them and they have to find different ways to cut costs. So depending on the call center that the banks hire, they may or may not be taking as extreme of efforts as others would do just for competitive purposes, to make greater profits.

SCOTT JAGOW: Well these call centers have become the lifeblood of some Indian cities like Bangalore. They can really ill-afford to have this security problem. So is the government doing anything?

DAVID WELLS: They do need to be cleaner than clean, as you said because they do provide a massive number of jobs. They've helped to create a strong and growing middle class in the country so the government definitely is involved. It's more the industry associations though that get involved. The Indian IT and services sector has a group called NASCOM which has said now that it's going to work with legal authorities both in India and the UK to solve this issue. They do take these things seriously. Many of the businesses are run by people who have lived their lives abroad and then come back to India to make their riches in doing this and know sort of best practices from both a United States and Belfast and other areas where call centers are big. So they definitely will take it seriously.

SCOTT JAGOW: And the American and European banks that are outsourcing to these call centers, they're relying on the security of the call centers, they don't have any control over that themselves right?

DAVID WELLS: It depends on the bank. I mean you have multiple security systems within any bank, and banks spend billions of dollars a year on IT and on protection. It depends agreement by agreement with the various call centers as to who and how the data is protected. Ostensibly the banks would be hiring companies that would have strict firewalls put in place and they would vet their employees carefully. Clearly in this instance the employee wasn't necessarily vetted as well as they would have liked.

SCOTT JAGOW: OK David thanks a lot.

DAVID WELLS: Thank you

SCOTT JAGOW: David Wells is a deputy editor at the Financial Times Newspaper in London.

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