Running an offshore bank can be surprisingly cheap compared with a normal bank. There are several reasons why an offshore bank is cheaper to run than a normal bank.

Few or No Branch Offices
An offshore bank typically have few or no branch offices, so it will be able to save money on both rent and salary. If an offshore bank have branch offices, they might be located in the offshore bank's host country. Since offshore banks are often placed in 3rd world countries, the salary of the employees will be relatively low and thereby allow the offshore bank to save more money.

Less Administration
Most offshore banks are placed in 3rd world countries where the amount of administration related to running a bank might be relatively low. There are simply fewer rules and regulations that need to be followed and the offshore banks are therefore able to save significant time and money.

Automatic Processes
Almost all offshore banking activities are done through the Internet. This means that the activities are already in an electronic format that easily can be automatized. It might e.g. be possible to automatize check checks and thereby be able to lessen the offshore bank's number of employees.