Investment Banks May Outsource More Than IT

In an effort to take advantage of reduced expenses and highly qualified talent, financial firms are considering moving parts of their investment banking operations overseas.

Some observers say that as investment banks become more comfortable with overseas operations, they may begin to shift even some of their deal-making responsibility to foreign employees, reports CNNMoney.

By the end of 2007, JPMorgan Chase plans to have some 3,000 employees in India working for its investment bank. That staff will be responsible for foreign exchange trades and credit derivatives contracts, as well as research and analysis.

Citigroup, Morgan Stanley, Lehman Brothers and JPMorgan Chase have all moved research analysis operations overseas, says CNNMoney, noting that, in the words of one observer, "Investment banking has a lot of number crunching that to a large degree can be done anywhere."

A report by Deloitte Touche Tohmatsu says that as financial firms drive to cut expenses, they'll move 20 percent of their total costs base offshore by the end of 2010, compared to the current average of 3.5 percent.