The report was published after a visit to 10 operations in India and a review of questionnaires from five others. It concludes that offshoring can contribute "a material risk to the FSA objectives of market confidence; reduction of financial crime; and consumer protection."
In particular, the financial watchdog was concerned about difficulties in overseeing and controlling the operation from a distance.
While it was only the major players in the offshoring market that were visited, the review did find that they had adequate oversight frameworks and were working hard to identify operational risks.
The report also shows that the FSA's concerns over staff attrition and business continuity planning have been allayed to some extent by the strategies that have been put in place to deal with them.
Firms have factored attrition rates into their recruitment and training policies, and are developing alternative options to deal with the threat of business disruption, says the report.
With regard to security and consumer protection, the FSA found "a high level of security in operation and some firms stated that security is far more controlled than in the UK".
Swipe entry clearance systems are common and there is usually a ban on staff taking cameras, mobiles or bags to their workstations. Paper used by staff for notes is usually shredded later, or numbered, in order to check that all pieces are accounted for.
"In conclusion," says the report, "companies have implemented systems to monitor phone conversations, protect data and monitor staff. There is no evidence to suggest consumer data is at greater risk in India than in the UK."
