The Motley Fool is wading into the outsourcing and privacy debate after the most recent CitiBank incident. The author's conclusion is that outsourcing is not the problem, but criminals are the problem.
How Dangerous Is Outsourcing? [Fool.com: Motley Fool Take] April 11, 2005:
"...Exaggerating the dangers of outsourcing and sending data abroad won't make our data any more secure. On the contrary, the facts of the Mphasis case suggest that in some cases, data may be safer once sent abroad. Reflect for a moment on how quickly the alleged criminals in Pune were caught. Consider for a second the fact that they were caught by the 'cybercrime unit' of the Pune police force. Ponder for a minute the fact that a place most of us have never even heard of before (really? 'Pune?') even has something called a 'cybercrime unit.' I know my hometown doesn't.
Then come to the correct conclusion: Outsourcing wasn't the problem here. The problem was criminals, plain and simple. And those can be found the world over."
The only thing I'd add is you want to make sure your customers' data goes somewhere that you can expect assistance in dealing with the issue. Like beautiful Nova Scotia, for example....