Business View: From the ivory tower to Bangalore, the world's local bank listens no more

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The Independent Online

You can see HSBC's headquarters from our office. It is a tall, imposing but architecturally unimpressive tower in the Canary Wharf complex. And as far as I can tell, it's not ivory. So why is HSBC so out of touch?

Few can blame "the world's local bank" for wanting to transfer some of its call centre and data processing from the UK to the emerging mid-tech powerhouses of India and Malaysia. Everyone from BT to the Pru to National Rail Enquiries is doing it. Not only are staff there cheap, they are well trained and hard working. The technology developed for call centres these days allows you to operate in all sorts of remote locations, avoiding overnight shift work in the UK (which is damn expensive). High-speed - and secure - data links means someone in Bangalore can call up the info a customer needs as quickly as someone in Barnoldswick.

HSBC's transfer of 4,000 jobs is potentially the tip of the iceberg. Royal Bank of Scotland and Barclays have both toyed with moving quite a lot of back-office people abroad, but have held back for reasons I will come to. Given there are nearly a million people employed in call centres in the UK, it is not hard to see 200,000 or so jobs being transferred abroad in the next couple of years.

But is this bad for the economy? Not necessarily. Call centres may be large-scale employers of moderately well-educated people but research has shown they do not deliver the sort of knock-on effects for local economies that other industries do. Also, the sector is still growing more quickly than the rest of the economy, so transferring 200,000 jobs out of the UK does not mean a net loss of 200,000 jobs. Indeed, it may not mean a net loss of jobs at all.

Staff turnover at call centres is high. It is hard work, with angry customers often taking out their frustration on you, and not all that well paid. Annual attrition rates can be as much as 100 per cent at some operations.

Which is why HSBC has made such a mistake. When RBS and Barclays looked at similar shifts, they realised that just shutting up shop and moving these operations en masse would harm communities and cause bad feeling. More sensible is to build ancillary operations in India, or wherever, and run them in tandem; the technology allows you to do this. If you want to cut the number of staff employed in the UK, you can do it gradually by not replacing people as they leave.

The reality of the call centre industry moving abroad has dawned on most people - even the trade unions. HSBC has acted like a bull in a china shop. It should remember that when it was called Midland it was known as the listening bank.

Barclays' card trick

Having dithered about whether to accept the Barclays chairmanship when he retires as chief executive, Matt Barrett might be wondering whether he made the right decision. So might the board after what is now being called his "Ratner moment".

Matt's little aside - surely I don't need to repeat it - at the meeting of the Treasury Select Committee on Thursday has been seized upon by the media and politicians as an indication that Barclays knows that Barclaycard is bad value yet continues to flog it.

And why not? This, of course, is the very nature of retail banking. The high-street banks depend on our laziness and confusion to make their profits. They want us to leave too much in our current account, not pay off our credit cards in time, not shop around for the best mortgage deals, and not check the fine print on our savings plans.

The Trade and Industry Secretary, Patricia Hewitt, wants to do something to remedy this. She has promised a White Paper containing a proposal to update the 29-year-old Consumer Credit Act, which was written when Barclaycard and Access were the only credit card choices. Consumers would be offered clearer credit terms, an end to "small print" and greater protection.

But there does not appear to be too much of a hurry in government to get these laws in place. The White Paper was due out this week but may not now be published before the end of this month.

Meanwhile, the credit card offers keep flooding in. If Matt's mistake has put you off Barclaycard, try the Monument card, which is being offered in direct mail deals across the south of England at the moment. Who's it from? Oh, Barclays.