The survey by Deloitte Research found that financial institutions expect to reduce costs by nearly $1.4 billion each by 2008 by sending work to low-cost centers like India from developed economies in North America, Europe and Asia.

The survey, in which 27 of the world's largest institutions participated, offers a snapshot of what financial-services concerns are planning in their efforts to transform their operations by reducing their cost base and making their organizations more international.

Thirty percent of the respondents currently have existing offshore operations and that percentage is expected to climb to 75 percent within two years, according to the survey.

"Offshoring is gaining momentum at a rapid pace," says Christopher Gentle, a director at Deloitte Research. "And getting offshoring experience as soon as possible translates into greater benefits -- from higher cost reductions to more business processes being handled by the low-cost centers."

Of financial-services firms transferring functions offshore, nearly half are targeting India, which has a huge market of IT professionals who earn much lower wages than elsewhere, according to the survey. Ireland and South Africa are also attractive offshore centers, with China, Malaysia and Australia growing in popularity.

Deloitte Research estimates that more than a million jobs -- or about half of the estimated relocations -- will move to Indian Ocean rim over the next five years.

The survey shows that banks and insurance firms are transferring offshore such functions as application development, coding and programming, accounting and finance, operations, processing and administration, contact support and call-center operations.