After IT outsourcing, it’s now time for investment banking. After years of outsourcing technology support and other back-office operations to countries like India and China, financial institutions are increasingly looking to move large portions of their investment-banking operations abroad, according to a recent report by Deloitte Touche Tohmatsu.

Faced with a dearth of skilled workers and shrinking profit margins, banks that want to remain competitive in the global marketplace can't afford to miss out on high-quality — and cheaper — foreign talent, the report said.

As a result, what began as technology support is now morphing into more analytic operations. Among the leaders in outsourcing and offshoring are the big investment banks — Citigroup (Research), Morgan Stanley (Research), Lehman Brothers (Research) and JPMorgan Chase (Research). Typically, these banks have moved their research-analysis operations offshore in order to take advantage of the time difference between the U.S.A. and Asia, as well as for cheaper labor.

The Deloitte report indicated that offshore operations give financial-services companies a foothold in new and emerging markets such as China, where there are more revenue opportunities than mature markets like the U.S.A.