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UBS has joined rival finance players to retreat from giving their information technology to outside vendors. Now, offshoring hubs are getting an upgrade.

The Zurich-based bank UBS posted a surprising statistic in its second-quarter results: the bank’s staff count jumped 7 percent to 63,684 people, from 59,470 year-ago. 

The rise in staff is counterintuitive at a time when banks are cutting jobs in order to slash their budgets: UBS aims to reduce costs by 2.1 billion Swiss francs ($2.14 billion) by the end of 2017 (a target it has already hit). 

The jobs shift can be traced in part back to Harald Egger, whom the Swiss bank movedto Mumbai earlier this year. The 20-year-veteran of UBS has been head of sourcing at the Swiss bank for the past seven years, a job which means he is chief cost-cutter.

Mundane vs. Complex

Egger’s move to India comes as banks attempt to wean themselves off outside IT professionals, reversing one of the first dramatic cost-cutting moves undertaken a decade ago. If the service centers took care of relatively mundane tasks like call centers ten years ago, they are upgrading to far more complex tasks today, Egger told journalists in Zurich.

«The typical business processes outsourced ten years ago like data inputting can be digitized or automated,» Egger said. Instead, he is looking for mathematicians, statisticians, physicists, and other highly-qualified science and technology graduates.

India is producing them at a rate second only to China: the country produced 2.6 million graduates in the highly sought-after science, technology, engineering, and math faculties in 2016, according to data from the World Economic Forum. That is more than four times the rate of the U.S., in third place.

CS Banker Moved

Why? The math is the obvious reason: Indian specialists cost less than those in Switzerland, the U.K., or the U.S. But banks like UBS and Citigroup, also a heavy user of Indian IT expertise, are taking it one step further, and shifting infrastructure to their own Indian operations.