Big Surge Expected In Offshore Outsourcing By Banks, Study Says

Offshore tech spending by banks will increase from the present 6% of the banking industry's $44 billion total annual IT budget to 30% by 2010, according to Deloitte.

"Among larger institutions in particular, offshoring is not one available cost-cutting strategy, it's become a basic necessity," says the study, which was released Wednesday. Banks are moving well beyond outsourcing low-level application maintenance work and are increasingly relying on offshore service providers for help with more sophisticated technology projects, the study says.

Offshoring tech work offers big savings as programmers in India, for example, are paid anywhere from 40% to 80% less than their U.S. counterparts.

Deloitte says banks can save 40% on most IT projects by moving them to an offshore service provider.

Business Economists See Riskier Mortgages as Biggest Danger, but ...

According to an article in USA Today, a report to be issued today indicates that, among business economists, "subprime mortgages" are considered the greatest risk to the financial markets. They are, however, in good company, as "hedge funds" and new forms of credit card lending without traditional credit history checking are raising concerns.

Riskier financial strategies have been making the news lately, as "hedge funds," described as "eclectic" in their strategy by an International Monetary Fund article, often located in tax havens and otherwise avoiding tax and regulatory issues, are causing concern. In the U.S., "subprime" mortgages have been enticing less-qualified borrowers with "teaser" rates and more recently an increasing foreclosure rate, and banks such as Bank of America are beginning to offer credit cards to anyone who has a "taxpayer ID number," which is a number issued to anyone who pays taxes in the U.S.