.S. financial services companies plan to move more than 500,000 jobs (about 8% of their workforce) to foreign countries over the next five years, according to a study by Electronic Data Systems Corp. subsidiary A.T. Kearney.

The jobs targeted for relocation include those in financial analysis, research, regulatory reporting, accounting, human resources and graphic design. Typically, most jobs transferred overseas have been focused more on back-office functions such as data entry, transaction processing, account reconciliation and call centers.

The main reason for the migration is lowering costs in a weak economy. The study found that offshore relocations are expected to reduce annual operating costs for U.S. companies by more than $30 billion - mostly attributed to decreased costs in labor.

American Express Co., Citigroup Inc., General Electric Co.'s GE Capital Corp., J.P. Morgan Chase & Company and eFunds Corp. are some of the financial companies already making the move.

One of the top relocation targets is India, which has a large population of English speakers and college graduates and pays much lower wages. For instance, a call center employee in the U.S. earns about eight times more per year compared to a call center employee in India.

American Express is setting up a processing center in India. GE Capital already has 15,000 employees there and plans to add another 5,000 by the end of 2003, the Wall Street Journal reported. J.P. Morgan plans to establish an equity research department in Bombay and hire 40 junior analysts in addition to adding hundreds of new employees for back-office work there, according to the New York Times. eFunds is already set up in Bombay, providing customer service for EBT recipients in nearly 20 U.S. states.

Other locations cited in the study as possibilities include China, Brazil, Mexico, Philippines, Hungary, Ireland, Czech Republic, Australia, Russia and Canada.

A.T. Kearney's study involved 100 financial services companies and reflects the answers of senior executives, such as CEOs, CFOs and CAOs, as well as A.T. Kearney's analysis. For more information, visit www.atkearney.com/main.taf?p=1,5,1,130