MphasiS case will hit BPO spread: Forrester

Research and consulting firm Forrester Research has stated that call centre expansion in India will be hit by as much as 30 per cent due to the recent MphasiS incident wherein the company's employees were arrested for allegedly stealing $350,000 from the accounts of four customers of their BPO client, Citibank.

Recently three former MphasiS employees were arrested for allegedly stealing more than $350,000 from the accounts of four customers of Citibank.

The MphasiS staff members acquired the passwords to the end customer accounts and transferred the money to their own accounts. The fraud occurred from the end of February until the past week.

"This incident, coupled with skyrocketing call centre attrition rates, will severely dampen BPO growth rates, especially in the call centre customer service space in the next 18 months," Forrester adds in its recent report.

MphasiS officials were unavailable for comment.

Industry players are, however, unfazed by this incident. They point out that such fraudulent acts are not uncommon and are not India-specific. According to some of the domestic third party players "these are not issues which clients are unaware of. It is a part and parcel of business."

Prudential Process Management Services (PPMS - Prudential's BPO company) human resources director Atul Sharma, says: "This occurrence has highlighted the need for a more emphasised focus on security especially as companies begin to spread geographically. All players involved "" the third party vendors as well as captive units "" will have to give much more of an assurance. As for such incidence, there are solutions to counter it and will call for an increased focus on confidentiality."

The impact of this incident is likely to be felt only in the short term, domestic third-party players said. They do agree with Forrester, which in its report states that more regulation and enforcement will be called for.

But they disagreed that expansion would slow down. "At the most the contracts will be delayed, but the amount of work supposed to be offshored will not stop. Companies across the globe have realised the advantages and benefits from outsourcing. This will not change or stop," they said.

Another player in the BPO space added "the fact that an action was taken swiftly by the police has demonstrated that the country is well placed to handle a situation such as this."