Britons worried about bank data security offshore

LONDON: British bank customers are concerned that banks are holding their personal details in offshore customer service centres, which are not subject to UK data protection laws, a survey showed on Tuesday.

At a time that banks are setting up call centres and processing more operations overseas, accountancy firm KPMG said two-thirds of respondents to a survey said they would be very concerned if they knew their details were held in a customer service centre offshore.

Another 28 percent said they would be slightly concerned. But the research showed that 77 percent of respondents admitted they had no idea whether or to what extent their bank or credit card provider outsourced any operations.

Karen Briggs, head of regulatory services at KPMG Forensic, said consumers are clearly concerned about their perceived vulnerability to data breaches after some publicised instances in which customer data was sold. But she said the concerns are not prompting customers to do much about it.

"The crunch is likely to come if and when there is a breach of their account details and a fraud is committed," Briggs said. "That is when the evidence shows that customers are very likely to defect."

KPMG said fraud against financial institutions is growing and estimated that it reached 12.9 million pounds in value in the first half of 2005, up from 7.3 million a year earlier.

Briggs said banks and credit card providers need to ensure they have rigorous anti-fraud controls in place and need to "get on the front foot" to communicate about the controls they have put in place in their overseas operations.

Many financial service firms have moved transaction-based information technology jobs and call-centres to India and elsewhere mainly to cut costs. A survey by PricewaterhouseCoopers released earlier this month showed the trend was set to continue.

PwC said a quarter of the respondents to its survey had moved offshore 10 to 20 percent of their headcount, but in three years' time almost half of the respondents expected this to be the case.