More security breaches in U.S., says Forrester

Monday, June 27, 2005

NEW DELHI: In the eye of storm, the Indian BPO industry has got a breather from unexpected quarters. Even as the industry grappled with the possible impact of the recent expose on an Indian call center by a British tabloid, a senior Forrester official said that leading Indian companies are "way ahead of others" in terms of process, methodology and delivery. He emphasized that the issue of security breaches is not "offshore-centric."

"In the last 2-3 months, there have been two reported incidents of BPO security breaches in India compared to two dozen cases in the U.S. While the MsourcE BPO case involved four customers, the recent Karan Bahree incident purportedly affected 1,000 customers in U.K. banks. In contrast, the data breaches in the U.S. have impacted millions of customers," Sudin Apte, Country Manager India, Forrester, said, terming the latest case as a "stray incident."

"It is not only India. The problem is not offshore-centric," Forrester said, citing incidents and the size of the impact of several security breaches that happened in connection to data of Bank of America, Citi, MCI, Ameritrade, Card Systems, Time Warner and LexisNexis. He said Indian firms should rather use this opportunity to establish comfort with their clients by demonstrating superior security standards set within their companies.

Forrester's earlier report, stating that the alleged account theft by the coming months, had sparked off a debate in the industry. Most recently, another study by the firm had found that an overwhelming majority of 31 foreign BPO clients planned to step up investigation of vendors' security and business processes to mitigate risks.

"However, the event in Gurgaon has been relatively small compared to what has been happening in the US. We have to gauge whether the confidence of U.S. consumers in using technology for their day-to-day transactions has got shaken," Apte said.

He said the recent incidents would bring under the scanner the concept of outsourcing (including U.S. companies outsourcing work to other U.S. companies), rather than off-shoring .

"However, as far as latest report is concerned, I think we will need to wait for more specific details of the case. Currently, the details available and the `tabloid' nature of the story are not convincing enough to drop the guns," he added.