RBS IT workers can breathe a sigh of relief – reports suggesting that it was about to shift $2bn worth of technology functions to India have been vigorously denied by the bank. However, one thing is certain – offshoring is back on banks' agenda for 2010.

The Economic Times in India claimed that IT service providers in the country were going to be the main beneficiaries of a £6bn tech spending spree by RBS. The bank has since countered the claims, saying that the report was "incorrect and a misrepresentation of RBS' investment plans".

RBS has typically been anti-offshoring anyway, says Nigel Roxburgh, director of outsourcing consultancy SourceGene, in spite of suggestions it may have recently changed its stance on the matter.

"This year UK banks have been more reluctant to offshore IT functions, because of the political sensitivity around headcount reductions," he adds. "But I suspect many will bite the bullet going into 2010."

This echoes comments in the FT from HCL Technologies president of enterprise applications and consulting, who suggested banks' would turn to outsourcing over the next 12 months.

"Partly because there were a lot of acquisitions that happened during the credit crunch, suddenly there's a lot of work around merger integration in financial services," he said.

Bank of America, Citi and JPMorgan have all been linked with Indian IT services firms and Nordic banks Nordea, Svenska Handelsbanken and SEB are all considering similar moves.

However, the assumption that offshoring banks' IT functions to foreign climes will come at the expense of UK jobs is not always an accurate one, suggests Nick Mayes, consultant at IT think-tank Pierre Audoin Consultants.

"Considering the recent merger activity, there could be additional integration work on banking technology systems inherited through acquisition, which may be best performed at an offshore site – but this is affectively new work."