Banks Moving Jobs Overseas Should Do Proper Risk Analysis

With all the protections banks around the world are getting from their governments it appears proper risk analysis is out the window.

It is very disheartening that they are using that protection as a way to cleanse themselves of bad decisions and poor investments at the expense of sacking large numbers of their employees.

This flies in the face of record profits (in Australia at least) and significant pay rises for executives. I just wonder sometimes why share-holders have no say in executive remuneration when they own the company.

Maybe the Banks’ crystal ball for the financial future is telling them we are in for a long dark financial winter so they can afford to divest themselves of staff they might have to re-employ again in a few months if the bull market comes roaring back.

Enough said on that topic. My concern is more to do with them sending my bank information to India at this time.

I don’t want to be an alarmist but the banks failed to see the credit crunch so what makes you think they have even considered the following;

  • Mumbai has just suffered a major terrorist attack from supposedly a bunch of Pakistani-based terrorists killing many people and causing extensive damage. This is one of many attacks in recent times.
  • The Pakistani Government claims it is innocent but may well be on the bring of serious civil unrest if not civil war and has a tenuous grip on power.
  • There is talk of war with Pakistan from India’s side. India bungled the security which allowed this attack to occur and may want to save face by attacking Pakistan.
  • India has 150 million Muslims living within its borders who are probably the object of even more hate from the Hindu majority even though many are loyal to India.
  • Travel Warnings have been issued in Australia, the US and other nations for their citizens intending to travel to India and Pakistan.
  • The terrorists rounded up European and US citizens and either held them hostage or killed them.
  • Planned Tours to India are being cancelled all over the world.
  • There is a world-wide financial melt-down in process with far reaching consequences and maybe a lot more heart-ache to come before it is over. This could lead to civil unrest in many countries including India.
  • If there is a war between India and Pakistan which side will the US back? Australia is likely to follow the US. If it is Pakistan (War on Terror Ally) where do we stand with our banking information?

So having considered just this quick list of risks is it such a good idea to sack staff in peaceful Australia and relocate their jobs to volatile India along with more of our private banking information.

Worse case situation. What if a Bank’s data centre is blown up in India? Will the bank be able to function? How integrated are the computer networks and how distributed is the data? How secure is my information should India cease to be an ally? Will I be able to find out my bank balance? Will I be able to draw my money out that day? I don’t know and I doubt they would tell me anyway.

Even if everything is fine it makes no sense to me for any bank to be relocating more jobs, data and services to a country where unrest is increasing significantly day by day, and is likely to get worse if the financial crisis deepens, as it is expect to do next year. Especially so when much of the hate is likely to be directed at European and US entities.

The credibility of banks has been seriously questions with their failures to come clean over their exposure to subprime mortgages, CDO’s, Bad Debts and highly leverage brokers. So be cautious when dealing with them.

As a Baby Boomer I am concerned that whilst India may be a great place to visit normally, with all the bombs that have exploded it doesn’t make sense to me to put more bank information in the data centres there.

Cost cutting, increasing executive salaries, moving sensitive data to potential war zones is not what banks should be doing right now. To me it shows just how out of touch they still are. Protecting their clients assets is what it should be about even if that comes at the expense of some profit in the short term.

Right now I have my money distributed across the Big Four banks in Australia. I will begin looking for local banks that do not outsource their data centre files and data overseas. As a precaution I’d suggest all Baby Boomers do the same.

All banks and credit unions in Australia have a three year government guarantee on deposits so it should be find to move your money to a smaller bank that has all their resources located in Australia.

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