JPMorgan Chase to increase India Outsourcing by 25 per cent
The second-biggest bank of the US, JP Morgan Chase, will increase its outsourcing to India by 25 per cent this year to nearly $400 million.india Updated: Mar 12, 2009 15:17 IST
The second-biggest bank of the US, JP Morgan Chase, which acquired Washington Mutual and Bear Stearns recently, will increase its outsourcing to India by 25 per cent this year to nearly $400 million, says a report by
. It will also manage the integration of the acquired firms from India to bring down the cost of integrating different information technology (IT) systems.
Right now, JP Morgan outsources $250-300 million worth of IT andback-office projects every year to Cognizant, TCS and Accenture, apart from to its own captive centre in Mumbai.
"JP Morgan CIO Guy Chiarello said he will increase outsourcing to India, and will drive several integration projects from there," a New York-based expert, familiar with JP Morgan's outsourcing plans, told media last week, on conditions of anonymity.
A spokeswoman for JP Morgan India could not reply to an email query sent by Friday, and the bank's spokesperson in the US too did not reply.
"JP Morgan is one of the first banks in the US to have fleshed out its outsourcing strategy ever since the banking meltdown happened. Many others are still undecided about their IT expenditure," said a senior official at one of the technology firms, who did not wish to be quoted.
As these banks merge, they face a huge task of integrating their software applications, consolidating their data centres and other trading platforms into a single entity, so that their customers are able to transact without having to face any merger-related issues. And since offshoring will help them save costs by 30-40%, these merged banking entities are seeking to partner with a vendor having significant offshore presence. "Apart from looking at cost-saving opportunities, such as offshore outsourcing, these banks also want to partner with their existing vendors because they would know the
systems better," said a consultant on condition of anonymity.
A recent report, Lloyds TSB-which merged with HBOS-is seeking partners to help the merged entity integrate its retail and wholesale banking systems through an IT platform. The company has already outsourced its HR functions to Xansa two years ago, in a five-year deal.