Banks were early participants in the offshoring movement, which started about 20 years ago. They have been under pressure from activist investors and other shareholders to cut expenses even as regulatory costs are on the rise, and sending work to India, the Philippines and other locations where salaries are still lower than in the U.S. and exchange rates are favorable is a means to that end.

Yet the two decades of experience with offshoring has shown that shifting operations work from knowledgeable, local workers to people in another country with oftentimes limited training comes with risks — of errors, of misunderstandings and of security lapses.

I'm not sure offshoring is the greatest long-term macrostrategy, because as they offshore services, they become harder to manage.

The custody banks are under as much pressure as any financial services organization to rein in costs. 

State Street in Boston has announced plans to lay off 7,000 workers by 2020, and Bank of New York Mellon has been engaged in a multiyear cost-cutting plan.

Asset servicing at BNY Mellon, can testify to the advantages of offshoring, that there are some challenges, too. About 40%-45% of the operations are in the United States, and the remainder are distributed equally between Europe and Asia

BNY Mellon has been outsourcing work to India for 10 years; it has operations in the cities of Pune and Chennai. 

Its goal is to have a "follow-the-sun model…so you could get more work done around the clock, so you're much more responsive and you can reduce the time to do a transaction.

Geographic dispersion also mitigates risk. 

During Hurricane Sandy, for instance, work that normally would have been done stateside was done in Europe and Asia without interruption. 

And international clients sometimes ask to have work done locally, in their own time zone.

Time differences do present a challenge, he noted. 

If a European client's work is being done in Florida or in India, the disadvantage is if the client needs to talk to somebody right away, you may not be able to get to them unless you're doing a night shift. 

The advantage is you can continue to do the work even after the client has gone to sleep.

Other things can be a problem, too, some sources point out.

One downside to shipping work overseas is the potential for errors as newbies try to decipher shorthand instructions from long-term clients.

In one case told by the ex-BNY Mellon worker, the bank's India outpost received an order from a shareholder who wanted to withdraw $20,000 from an account and requested that 100% of that amount be removed from a certain fund, but an India-based worker misunderstood the instruction and redeemed 100% of the account, or $100,000. 

The bank had to purchase that back at no penalty to the shareholder.

A lot of times, they have that lack of comprehension because it's not black and white," If it's not written so it's understandable by them, they will make a mistake on it.

The misunderstandings brought on by language can be comical. 

In addressing the general problem of errors, acknowledging that understanding client preferences can be an issue for new workers at a foreign location who speak another language, especially for call center work. 

But whether domestic or foreign workers involved, a learning process is involved.