The future of large-scale technology outsourcing deals is being questioned after two international investment banks last month cancelled their outsourcing arrangements and brought technology operations back in-house. While some see it as a blip in the continued growth of outsourcing, others suggest it marks a fundamental change of strategy by financial institutions.

Octavio Marenzi, president and chief executive of Celent Communications, a market research firm, said: "Huge deals are falling out of favour. Banks are finding that getting rid of staff, technology and business processes on such a scale is becoming less attractive."