Coronavirus in India: Wall Street giants swept away by brutal wave of Covid in India | Business News in India
BENGALURU: About 8,300 miles east of Wall Street, on a stretch of Bangalore’s Outer Ring Road, is what was once the back office heart of the global financial industry.
Before the pandemic, this cluster of glass and steel towers housed thousands of employees from companies like Goldman Sachs Group Inc. and UBS Group AG, who played critical roles in everything from risk management to customer service. and compliance.
Now the buildings are strangely empty. And with the number of cases skyrocketing in Bangalore and much of India, work-from-home arrangements that have supported Wall Street’s back-office operations for months are under intense pressure. A growing number of employees are sick or scrambling to find essential medical supplies such as oxygen for relatives or friends.
Standard Chartered said last week that around 800 of its 20,000 employees in India were infected. As many as 25% of employees on some UBS teams are absent, said a company executive who spoke on condition of anonymity for fear of losing his job. At Wells Fargo & Co’s offices in Bangalore and Hyderabad, work on co-branded cards, balance transfers and rewards programs is behind schedule, an executive said.
While banks have so far avoided major disruption by shifting tasks to other offshore hubs, India’s Covid crisis has exposed a little-discussed vulnerability for companies that have spent decades outsourcing functions in the industry. country. The epidemic in India is escalating even as vaccinations fuel economic recovery in other parts of the world, heightening fears of a back office bottleneck at a time when Wall Street companies rarely have been busier.
“It’s not a local problem, only Indian, it’s a global crisis,” said DD Mishra, senior senior analyst at researcher Gartner Inc. The current wave will be “much bigger” and organizations with staff based in India “will need to take action to plan and mitigate if necessary,” Mishra and colleagues wrote in a note last week.
Nasscom, the leading lobby group for India’s $ 194 billion outsourcing industry and its nearly 5 million employees, has played down the threat to operations. But Mishra and his fellow analysts at Gartner say they receive a flood of calls from anxious global customers on a daily basis, wondering about the Covid-19 situation.
The total number of coronavirus infections in India has exceeded 21 million, of which around 7 million have been added since mid-April. The state of Karnataka, whose capital is Bangalore, reported more than 50,000 new infections in the last 24-hour period for the first time, nearly half of them in the city.
Experts have warned that the crisis is likely to worsen in the coming weeks, with a pattern predicting up to 1,018,879 deaths by the end of July, quadrupling from the current official tally of 230,168. A model prepared by government advisers suggests the wave could peak in the coming days, but the group’s projections have changed and were wrong last month.
In Bangalore, Delhi and Mumbai, the three main bases of the financial giants’ operations, infection rates have reached such alarming levels that local governments have ordered strict restrictions on travel.
As the crisis hit swathes of the national economy by $ 2.9 trillion, the latest wave has particularly hit the 20-something population that dominates outsourcing companies and is hard to replace. Most of them are English speaking and technically skilled workers.
Business continuity planning
For now, back office units either bring part-time workers together or ask employees to take on multiple roles and reassign staff to make up for those who are absent. They schedule overtime, postpone low-priority projects and conduct pandemic continuity planning exercises for several locations if the wave of the virus intensifies.
A Wells Fargo employee said some of the work is moving to the Philippines, where staff are working night shifts to take over. The San Francisco-based bank employs approximately 35,000 workers in India to help process auto, home and personal loans, make collections, and assist customers who need to open, update or close their bank accounts. The company did not respond to a request for comment.
A UBS employee said that in the absence of many of the bank’s 8,000 employees in Mumbai, Pune and Hyderabad, the work is shipped to centers like Poland. The employees of the Swiss Bank in India take care of transaction settlement, transaction reporting, support to investment banks and wealth management. Many tasks require same-day or next-day turnaround times. A UBS representative did not respond to a request for comment.
With uncertainty over when the Indian government will contain the crisis, an executive who asked not to be identified equated the situation with flying blind with no idea how many employees will be affected. ‘week to week.
Rebalance the loads
“We are looking carefully at how we can rebalance the load,” Bill Winters, CEO of Standard Chartered, said on an earnings call last week, noting that some work has been routed to Kuala Lumpur, Tianjin and Warsaw. “Either way, we think we are very well provided.”
Jes Staley, CEO of Barclays Plc, said some functions have been transferred to the UK from India. Call volumes have increased and people are in distress, he said, adding that signs of pressure were to be watched. The bank has 20,000 employees in India.
Last year, when a sudden lockdown ordered by Prime Minister Narendra Modi saw these banks scramble to maintain operations, the European Banking Authority said the push to outsource support functions “exposed these banks to operational risks â€.
After asking their employees to work from home en masse last year, most of them have continued to operate at work from home levels close to 100%. Natwest Group Plc’s workforce in Bangalore, Delhi and the southern city of Chennai – representing one-fifth of its global total – is fully set up to work from home.
Management bandwidth
Likewise, thousands of Goldman employees work from home and perform high-end business tasks such as risk modeling, accounting compliance, and application building. A representative from the bank said the workflows can be absorbed by the larger team if needed and that there has been no significant impact so far.
Citigroup Inc said there was currently no significant disruption, while Deutsche Bank AG said employees were working seamlessly from their homes. Morgan Stanley and JPMorgan Chase & Co detailed the relief efforts they are undertaking, but did not specify the impact on their operations. HSBC Holdings Plc CEO Noel Quinn said last week he was “watching closely” and ruled out any significant impact at this point.
In addition to worrying about operational disruptions, employee well-being and securing medical aid also take up a lot of management bandwidth in every large outsourcing unit.
At a recent virtual meeting of the corporate strategy team at Accenture, for example, the discussion was not about usual salary increases or promotions. Instead, worker after worker demanded flexibility, reduced workloads and non-meeting Fridays, one executive said, asking not to be appointed to discuss internal company issues.
Their size has become a barrier, one executive said, but it’s unclear where they can go for their talents and stature, he added.
“We tell customers that they need to relax service levels and lower expectations for the next few weeks,†said Mishra, the Gartner analyst. “This is not a normal situation.”
Before the pandemic, this cluster of glass and steel towers housed thousands of employees from companies like Goldman Sachs Group Inc. and UBS Group AG, who played critical roles in everything from risk management to customer service. and compliance.
Now the buildings are strangely empty. And with the number of cases skyrocketing in Bangalore and much of India, work-from-home arrangements that have supported Wall Street’s back-office operations for months are under intense pressure. A growing number of employees are sick or scrambling to find essential medical supplies such as oxygen for relatives or friends.
Standard Chartered said last week that around 800 of its 20,000 employees in India were infected. As many as 25% of employees on some UBS teams are absent, said a company executive who spoke on condition of anonymity for fear of losing his job. At Wells Fargo & Co’s offices in Bangalore and Hyderabad, work on co-branded cards, balance transfers and rewards programs is behind schedule, an executive said.
While banks have so far avoided major disruption by shifting tasks to other offshore hubs, India’s Covid crisis has exposed a little-discussed vulnerability for companies that have spent decades outsourcing functions in the industry. country. The epidemic in India is escalating even as vaccinations fuel economic recovery in other parts of the world, heightening fears of a back office bottleneck at a time when Wall Street companies rarely have been busier.
“It’s not a local problem, only Indian, it’s a global crisis,” said DD Mishra, senior senior analyst at researcher Gartner Inc. The current wave will be “much bigger” and organizations with staff based in India “will need to take action to plan and mitigate if necessary,” Mishra and colleagues wrote in a note last week.
Nasscom, the leading lobby group for India’s $ 194 billion outsourcing industry and its nearly 5 million employees, has played down the threat to operations. But Mishra and his fellow analysts at Gartner say they receive a flood of calls from anxious global customers on a daily basis, wondering about the Covid-19 situation.
The total number of coronavirus infections in India has exceeded 21 million, of which around 7 million have been added since mid-April. The state of Karnataka, whose capital is Bangalore, reported more than 50,000 new infections in the last 24-hour period for the first time, nearly half of them in the city.
Experts have warned that the crisis is likely to worsen in the coming weeks, with a pattern predicting up to 1,018,879 deaths by the end of July, quadrupling from the current official tally of 230,168. A model prepared by government advisers suggests the wave could peak in the coming days, but the group’s projections have changed and were wrong last month.
In Bangalore, Delhi and Mumbai, the three main bases of the financial giants’ operations, infection rates have reached such alarming levels that local governments have ordered strict restrictions on travel.
As the crisis hit swathes of the national economy by $ 2.9 trillion, the latest wave has particularly hit the 20-something population that dominates outsourcing companies and is hard to replace. Most of them are English speaking and technically skilled workers.
Business continuity planning
For now, back office units either bring part-time workers together or ask employees to take on multiple roles and reassign staff to make up for those who are absent. They schedule overtime, postpone low-priority projects and conduct pandemic continuity planning exercises for several locations if the wave of the virus intensifies.
A Wells Fargo employee said some of the work is moving to the Philippines, where staff are working night shifts to take over. The San Francisco-based bank employs approximately 35,000 workers in India to help process auto, home and personal loans, make collections, and assist customers who need to open, update or close their bank accounts. The company did not respond to a request for comment.
A UBS employee said that in the absence of many of the bank’s 8,000 employees in Mumbai, Pune and Hyderabad, the work is shipped to centers like Poland. The employees of the Swiss Bank in India take care of transaction settlement, transaction reporting, support to investment banks and wealth management. Many tasks require same-day or next-day turnaround times. A UBS representative did not respond to a request for comment.
With uncertainty over when the Indian government will contain the crisis, an executive who asked not to be identified equated the situation with flying blind with no idea how many employees will be affected. ‘week to week.
Rebalance the loads
“We are looking carefully at how we can rebalance the load,” Bill Winters, CEO of Standard Chartered, said on an earnings call last week, noting that some work has been routed to Kuala Lumpur, Tianjin and Warsaw. “Either way, we think we are very well provided.”
Jes Staley, CEO of Barclays Plc, said some functions have been transferred to the UK from India. Call volumes have increased and people are in distress, he said, adding that signs of pressure were to be watched. The bank has 20,000 employees in India.
Last year, when a sudden lockdown ordered by Prime Minister Narendra Modi saw these banks scramble to maintain operations, the European Banking Authority said the push to outsource support functions “exposed these banks to operational risks â€.
After asking their employees to work from home en masse last year, most of them have continued to operate at work from home levels close to 100%. Natwest Group Plc’s workforce in Bangalore, Delhi and the southern city of Chennai – representing one-fifth of its global total – is fully set up to work from home.
Management bandwidth
Likewise, thousands of Goldman employees work from home and perform high-end business tasks such as risk modeling, accounting compliance, and application building. A representative from the bank said the workflows can be absorbed by the larger team if needed and that there has been no significant impact so far.
Citigroup Inc said there was currently no significant disruption, while Deutsche Bank AG said employees were working seamlessly from their homes. Morgan Stanley and JPMorgan Chase & Co detailed the relief efforts they are undertaking, but did not specify the impact on their operations. HSBC Holdings Plc CEO Noel Quinn said last week he was “watching closely” and ruled out any significant impact at this point.
In addition to worrying about operational disruptions, employee well-being and securing medical aid also take up a lot of management bandwidth in every large outsourcing unit.
At a recent virtual meeting of the corporate strategy team at Accenture, for example, the discussion was not about usual salary increases or promotions. Instead, worker after worker demanded flexibility, reduced workloads and non-meeting Fridays, one executive said, asking not to be appointed to discuss internal company issues.
Their size has become a barrier, one executive said, but it’s unclear where they can go for their talents and stature, he added.
“We tell customers that they need to relax service levels and lower expectations for the next few weeks,†said Mishra, the Gartner analyst. “This is not a normal situation.”
