Financial sector strain means more offshoring

The collapse of Wall Street is not good news for America or for information technology professionals. Besides the expected loss of jobs from big financial firms going under or being taken over, some believe the meltdown may prompt some financial services firms to increase their use of offshore outsourcing.

Computerworld.com points out that the financial services industry, including banking and insurance, is already the most aggressive industry in the U.S. when it comes to offshore outsourcing. It is the biggest single source of revenue for Indian offshore companies. Peter Bendor-Samuel, founder and CEO of Everest Group, a Dallas consulting firm, said the need for financial services firms to cut costs "will probably result in an acceleration of financial services jobs going offshore."

Eugene Kublanov, the CEO of NeoIT, an outsourcing management consulting group in California, said that for now, uncertainty will restrain financial services companies from taking on new offshore initiatives. But once these firms hit bottom and know where they stand, they will likely start new offshore ventures. He said this has been the pattern in previous downturns.

For more on outsourcing and the economy:
- check out this Computerworld.com article