HSBC banks on Indian call centres

BANKING giant HSBC is diverting calls from UK customers thousands of miles away to 'telephone bank tellers' in India. The initiative is likely to create thousands of jobs in India and the Far East at the expense of British workers. Other firms are expected to follow HSBC's example to take advantage of cheap labour abroad.

In a trial, about 15,000 telephone queries a week from British small business customers are already handled at an HSBC call centre in Hyderabad. Thousands of cheques, direct debits and other paperwork are also processed in Hyderabad and Guangzhou in China.

Customers pay a local rate to access the service, with the bank meeting the cost for diverting the calls via satellite to India. Executives say this expense is dwarfed by the huge savings on salaries. The bank plans to expand the initiative to personal customers, and is opening a centre in Malaysia and a second in India.

HSBC chief executive Sir Keith Whitson, who received £1.5m last year and was awarded shares worth £820,000 in the first half of 2002, has praised the Indian workforce for being 'highly educated' and 'well dressed'. He said shareholders would be 'dismayed' if the bank did not hire low-cost labour abroad. In India, HSBC is able to pay well-qualified graduates 20% to 25% of what UK staff earn.

Unions believe salaries on the sub-Continent will average £2,400 a year, compared with around £12,000 in this country. Indian employees also settle for longer working hours and shorter holidays.

Whitson took a swipe at the British work ethic, suggesting that staff in Indian call centres did a better job. 'They're quicker at answering the phone, highly numerate and keen to come to work every day,' he said. 'Staff are hugely enthusiastic about their jobs, they dress well. A lot have degrees. The quality of work is exceptionally high.'

HSBC operates call centres in Leeds, Swansea, Edinburgh and Hemel Hempstead, and runs seven other centres dealing with administration. Each admin request, including direct debits, changes of address and standing orders, is placed in a computer queue that can be processed by staff in the UK, India or China.

UNIFI, the union representing financial services workers, admitted that staff in India were often better educated than their British counterparts. Spokesman Liane Graves said around 1,500 jobs had been lost to 'natural wastage' in the UK in the last five years, with the work shifted to India and China. 'There has not been any compulsory redundancy. People have left of their own accord or been moved to other jobs,' she said.

Lloyds TSB is said to be considering a similar shift, while GE Capital already operates call centres in India dealing with UK customer queries. GE Capital was criticised last year when it emerged that Indian call-centre staff were urged to use English-sounding names so as not to upset Britons. Fake names were chosen using the same initial as the real name, so Sajid became Sean or Simon, Kapil became Kevin and Shweta became Sharon.

Stephen Alambritis, of the Federation of Small Business, rejected the policy. He said: 'Businesses don't want more call centres either here or abroad. They don't want to be treated as battery hens, they want personal contact.'