February 22, 2006
Investment banks lean more heavily toward outsourcing
Some of the largest investment banks in the world, including Citigroup (Research), Morgan Stanley(Research), Lehman Brothers (Research) and JPMorgan Chase (Research), have opted for outsourcing their research analysis operations to Asia. This trend is motivated by the twin advantages of the difference in time zones and the availability of cheap labor.
According to Alenka Grealish, manager of the banking group at Celent LLC: "By taking press releases and data feeds and digesting them offshore, the components can be made into basic analyst reports." JPMorgan has moved further ahead in its offshoring program by hiring research analysts in India, Hong Kong, and Singapore, and also outsourcing its back-office and call-center operations to complement its research team in the US.
According to Deloitte Consulting LLP, banks may soon increase their dependence on offshore talent to conduct due diligence and finalize prospective clients for investment banking business. In fact, outsourcing has become a necessity in the competitive market of today.
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