Credit Suisse plans captive unit in Mumbai

By SiliconIndia   |   Friday, 27 November 2009, 02:32 Hrs   |    13 Comments
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Credit Suisse plans captive unit in Mumbai
Mumbai: Investment bank Credit Suisse plans to bring back some core and proprietary projects in-house by establishing a new captive centre in Mumbai for knowledge process outsourcing (KPO) work.

Vineet Nagrani, who earlier helped Morgan Stanley to set up its captive operations in the country and is now the Managing Director and Head of Knowledge Process Strategy at Credit Suisse said that his company would continue to work with third party service providers, including Wipro.

"The success of Pune has given us the confidence to set up a pure captive. Initially, the captive will focus on the KPO but over time will include other areas too," said Nagrani.

Currently, the bank employs around 3,000 people in India directly and through third party vendors like Wipro. In Pune, it operates as a 'virtual captive,' a unit that works out of a Wipro facility and employs around 2,000 people. The investment bank will, however, also continue to work with third-party vendors. The new captive unit's focus will be more on work that is proprietary, client-sensitive and on work where it wants to institutionalize the know-how within the organization.

The bank reviewed some of the existing work it was doing with third-party vendors and the investments it needed to make in training and infrastructure before deciding to move them to the captive. "The productivity for certain tasks is much better when these are done in your captive facility," said Nagrani.

Credit Suisse's move reflects similar expansion or setting up of new back-office facilities by Wells Fargo and Standard Chartered. While Standard Chartered is setting up a new KPO centre in Bangalore, Wells Fargo is expanding its technology and back-office operations. Credit Suisse will follow a hybrid strategy that uses a mix of third-party vendors of in-house captive expertise as opposed to others like Goldman Sachs "You need both captive and third vendors. We have to try to figure out the optimal mix. A lot of work is getting commoditized and third-party vendors have the scale and the processes to do it at a reasonable price," said Nagrani.

Apart from India, Credit Suisse operates similar facilities in Singapore, North Carolina in U.S., and Wroclaw in Poland, which provide IT and other support functions to the parent. "The increase in the number of captive set-ups reflects signs of recovery in the overall market," said Amneet Singh, Vice President - Global Sourcing, Everest Group, which recently did a study on captives divestures and expansions. Some of the recent captive divestures include UBS' captive to Cognizant Technology Services, AIG's to MphasiS, and Schneider Logistics and Amex's captives to EXL Services.

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