Excerpts from Corporate Dossier, Economic Times, January 26, 2007

Reality check
Big brother is Watching

Under threat from international crime networks, BPOs are roping in former CBI sleuths and intelligence officers to run surveillance programmes on their employees

---TR Vivek---

WHEN THE English writer George Orwell wrote his dystopian novel Nineteen Eighty Four, way back in 1949, he couldn't have seen the coming of an industry called business process outsourcing. His concerns in the novel were deep, dark and geopolitical in nature. Fears of an Orwellian world might have come to an end with the death of communism, but the Indian BPO industry is turning into a mini Orwellian eco-system, with Big Brother lurking everywhere you turn.

A few months back, a case came to light where an employee of an Indian BPO was helping a bunch of UK-based fraudsters manipulate bank accounts to the tune of several million dollars. Once the unusual credit repair patterns was spotted, investigators put suspected employees on surveillance, tracked their system login history and conducted a series of interviews before zeroing in on the culprit.

Such forensic teams are a mix of former sleuths and cops who have a good understanding of crime, and auditors and bankers who have the ability to go through the nitty-gritty of numbers. Another recent case involved a departmental head at a BPO who was leaking client data to competitors. Forensic software was used to track and nail the culprit. After a series of back-to-back interviews conducted by a team of ex-intelligence officers and bankers, with more than five suspects, the offender, who was passing on proprietary information and corporate plans, was nabbed.

Client confidentiality and secrecy of the data related to their customers being paramount, the first brush with Big Brother occurs in the form of pre-employment screening and background and criminal check, as soon as a candidate applies to work at a call centre.

Although it sounds like a logistical nightmare, nearly every candidate who applies for a job with some of the larger BPOs in India has his or her antecedents checked by the companies. That includes but is not limited to verifying the educational qualifications mentioned by the candidates by checking with the concerned universities, residential address verification, and working along with the police to check if the candidate has a criminal record.

Interestingly, this has spawned a new revenue stream for universities, who have begun charging a fee from these agencies for verifying the academic records of their former students. Each verification could cost the BPO firms anything between Rs 3,000 and Rs 10,000. The checks also require 14 days to a month to execute. “There is an increasing tendency these days to misrepresent personal and career information. Every one in six applications that we check has some kind of false information. Checks ensure that reputation risks are mitigated,’’ says Ashish Dehade, MD, First Advantage Corporation India, a global risk mitigation and employment screening firm. “There is a huge fear of data leakage in the West, and India is a very important outsourcing destination. So we need to ensure that clients feel secure doing business with us,’’ adds Ashu Calapa, head HR, Firstsource, which completely outsources background checks to third party agencies such as First Advantage.

With inputs from
Vikas Kumar

India Confidential
BUT IS it an overreaction? Perhaps, but in this business it is better to err on the side of caution. Raman Roy, popularly known as the father of the Indian BPO industry, scoffs at such measures. “I can't understand what a background check or a criminal record check can achieve. Do all the offenders have a criminal record, or family backgrounds that are iffy? These measures are a result of ignorance about this industry, and will only help in maligning it,’’ he says.

While preventive and punitive measures are in place, the fact remains that no BPO can be fraudproof. “Fraud happens everywhere, but so far the scale has been very low here,’’ says Calapa. Most of the BPO frauds have been executed by firsttime offenders with no criminal record or background. Could it then be the BPO work culture itself that tends to engender such fraudulent behaviour by putting too much money too soon in the hands of youngsters in the beginning of their careers? Background checks are a stroll-in-the-park compared to investigations of fraud at BPO firms that are occurring more frequently than the industry would like to acknowledge. PWC's Makhija agrees that the number of BPO-related frauds is only growing. “As business grows rapidly, systems at BPOs are sometimes unable keep pace and that is when people start taking advantage,’’ he says.

With the fear of data security, abetted by the high-profile sting that the UK tabloid Sun carried out on a Delhi BPO employee, it didn't take call centres too long to install close-circuit cameras, monitor phone calls and the printouts taken by employees, ban gadgets like USB drives and camera phones and taking home personal stationery of any kind. “Our networks and electronic data platforms are encrypted to the highest level of security standards. We have very stringent rules on data that can enter into and be sent from our environment. We provide access to systems, web-sites, and data only as needed. Our customers trust us with their data only because we have demonstrated that we adhere to the strictest security standards. For instance, all sites are hardened by use of access control systems backed up with CCTV monitoring and physical separation from common areas,’’ says DP Singh, VP, strategic HR, IBM Daksh.

“Financial services is a very sensitive industry, and all these measures are mandated by regulatory authorities for our overseas clients. We are merely complying with them,’’ says Deepak Dhawan, VP and Global Head ( HR), EXL Service, which hires nearly 400 employees every month. With retail banking going through a high growth phase and an impending boom in the organised retail sector, such services are set to become even more valuable. Surely, this Orwellian world could do with more inhabitants.