Core elements of the global banking industry are moving to India

Statistics, data management and cloud-based operations are among its strengths

9.8.2019

India's laws may be perplexing and its domestic markets inefficient, but it's becoming an essential hub for international banks

Statistics, data management and cloud-based operations are among its strengths

F INANCIAL CENTRES , like delicate plants, thrive in the right conditions. Those include a vibrant private sector, banks that direct capital based on the prospect for profit, analysts with direct access to companies and investors, openness to foreign people and institutions, and business-friendly, consistent laws. For good measure, throw in the cultural amenities that attract the sorts of employees who could choose to live anywhere. India is not such a place. Its laws are many and perplexing; its domestic markets, inefficient and politicised. Though saving is unrewarding, capital is still costly for entrepreneurs. International firms are mostly limited to cross-border activities. It often scores badly on quality of life. Get our daily newsletter Upgrade your inbox and get our Daily Dispatch and Editor's Picks. So it is hardly surprising that although tiny Hong Kong and Singapore are globally renowned centres of finance, Mumbai, India’s financial capital, features low on most rankings. But the country is nonetheless becoming an essential hub for international banks. India is often their second-largest place of employment after their home country, and becoming ever more important for their innovation efforts. India has long received other countries’ outsourced jobs. Some of those are unsophisticated, such as answering phones or processing forms. Many, however, rely on Indian universities’ remarkable ability to turn out engineers in great numbers, and computing firms’ ability to use them to solve complex problems. Such tasks may be dismissed as “back-office”. But they are at the heart of modern finance. In recent years banks have become global networks that link apps on smartphones, workstations used for sales, and sophisticated programs used to manage compliance and allocate capital. Systems that once merely updated balances now determine financial-product marketing—whom to send offers to, when to increase credit limits and when to adjust charges. For banks all over the world, many such tasks are now done in India. Brain gain Even tasks that would seem to require the personal touch—a trusted adviser pitching a deal to the boss of a client firm, say—may rely on a fact-sheet compiled by an Indian research team overnight. The only things that cannot be done in India are client meetings, says Tuhin Parikh, a senior executive at Blackstone. Since 2014 the buy-out firm has nearly quadrupled the amount of property it leases in India to international financial firms, from 690,000 square feet (64,000 square metres) to 2.7m. India’s growing prowess in finance contrasts with its weakness in manufacturing. That is despite constant government intervention, most recently through the “Make in India” campaign launched in 2014 by the prime minister, Narendra Modi. The main difference is that financial firms, unlike manufacturers, are able to avoid many of India’s impediments: a maze of permissions and tariffs that control production, laws supposed to protect low-wage workers that instead discourage hiring, and wretched transport and communications networks. The towers that house international financial firms have dedicated phone and high-speed internet connections, generators to provide backup power and global standards of fire safety. Goldman Sachs’s new campus in Bangalore cost $250m. Once inside, a visitor feels he has been transported to the company’s New York headquarters (the same architect designed both). Both have similar amenities, such as subsidised fitness and child-care facilities, as well as a medical office. The number of people Goldman employs in Bangalore has risen from 291 in 2004 to 5,000. And India itself now provides expats, with more than 700 Indians on transfers to the firm’s offices elsewhere. In the past few years UBS has opened three new centres in India. The most recent, in the western city of Pune, is in a building shared by Credit Suisse and Alliance and Northern Trust, a stone’s throw from others occupied by Barclays and Citi. Between Mumbai and Pune UBS now has 4,000 employees. A sophisticated recruiting effort looks beyond recent graduates to tap émigrés who might be tempted back home by the right opportunity. Among the recent hires are a group of women returning to work after years away to care for children or ageing parents. Their careers have included stints at banks, rating agencies and a global pharmaceutical company, with expertise in risk analysis, quality control and product management. UBS ’s research department hires staff with expertise in cloud computing, statistics, machine learning and automation. They have contributed to recent reports using, for example, web-scraping tools to understand trends in the pricing of air-conditioning, geospatial technology to map bank branches and population density, and analysis of corporate filings to map cross-shareholdings of corporations and uncover their vulnerability to a credit crunch. UBS is perhaps unusually committed to innovation in India. But any large bank with operations in the country is making significant efforts in similar ways. With hindsight, given its prowess in computer engineering, all this will look obvious. But bankers say they have been startled by how fast India, notwithstanding its local challenges, has become an intellectual force that is now shaping their global futures. ■ This article appeared in the Finance and economics section of the print edition under the headline "On the way to Wall Street" Read more: The Economist

We’ll know where the water went Endia is one filthy country. Another less obvious reason than cost and talent: India is anti-bitcoin and banks are afraid of bitcoin. Saw that coming... International banks seeing the opportunity for more victims, which of course means more profit. The hitler's India..

Core elements of the global banking industry are moving to IndiaStatistics, data management and cloud-based operations are among its strengths Just get rid of the whole lot of them, put them in prison, the federal reserve in America too. They are nothing more than criminal operations, just like the owners of the economist. But they’re not in the EU 😱 Cost arbitrage! The cycle will take a spin in India too. When doing business in India will be expensive and likes of Philippines will be the new 'blue eyed boy' for these banks!

Japan's core machinery orders likely fell in June: Reuters pollJapan's core machinery orders likely fell for the second straight month in ... Japan is trying to make scapegoats for the safety and lives of some of the world's most talented athletes to gloss over the radiation disaster. Play in radioactively contaminated areas, feed on radioactive agricultural and fisheries products. What a bizarre country Japan is. 생각보다 빨리 망해 가는구나! 에

Don't Let The Name Fool You: Flutter Kicks Are One Killer Core MoveFlutter kicks are an awesome abs move that tones your lower abdominals. But you need to do it correctly to get the benefits. Here's how to do flutter kicks.

India plans to ease Kashmir curbs for Friday prayers: mediaAuthorities plan to relax curbs in India's Muslim-majority state of Jammu a... Exactly as slickenteur predicted many days ago. Must follow her guys, she does brilliant political and military analysis. There was no easiness its the 5th Day of curfew in Kashmir 😷 World is sleeping UN is sleeping SaveKashmirFromModi EndKashmirBlockade Give access to the media

Torrential rains cause flooding, evacuations in southern IndiaTorrential monsoon rains in the southern Indian state of Kerala caused a major l... Seems that's what just happened in Utah. Though no one cares about Utah.

Pakistan suspends trade ties with India over KashmirPakistan said Wednesday it is suspending bilateral trade with New Delhi and expelling India's high commissioner to Islamabad. Is Pakistan on a warpath? Omg its like the ugliest girl saying that i broke up first with you 😁😁



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