By TED GRIFFITH
The News Journal
Compared with neighboring states, Delaware is well positioned to
capitalize on banks' rapidly growing demand for data security centers
and capture the high-paying jobs they create, according to a recent
A study by Princeton, N.J.-based The Boyd Co. was positive news for
Delaware and Wilmington, the state's largest city, because data
security/data storage is one of the few niches within financial services
that's experiencing significant job growth, said John Boyd Jr. The
company advises banks and other financial service firms on where to
locate offices and other facilities.
"The fastest-growing sector of the financial industry is information
assurance, data storage and security," the consultant said. "Wilmington,
and Delaware, fit very nicely with the trend."
But the First State is facing competition for these high-paying data
banking jobs from small, low-cost cities in the West and the South, such
as Sioux Falls, S.D., and Winston-Salem, N.C.
There are about 41,000 people nationwide working in financial services
data security/storage, and that number is expected to grow by 19 percent
annually over the next five years, according the firm's projections.
Jobs in the field generally pay between $50,000 and $100,000, according
to the firm's study.
If major banks decide to locate their data security/storage centers in
Delaware, it could ultimately mean the addition of several hundred jobs
here, Boyd estimated.
David G. Bakerian, president of the Delaware Bankers Association, said
he, too, sees opportunity for job growth in this area, but he cautioned
that the state can't expect the field to generate thousands of jobs
because bank data centers generally don't employ large numbers of
No figures are available for the number of data security/storage workers
in Delaware. But the state is attracting at least some jobs in the
field. New York -based JPMorgan Chase & Co., one of the world's largest
banks, opened two data centers, one in Fox Point and the other in Bear,
in 2004. The centers' combined employment is around 100.
And Delaware has attracted data centers operated by businesses in other
industries, said Judy McKinney-Cherry, director of the Delaware Economic
Development Office. For example, New Jersey-based industrial
conglomerate Honeywell early next year is expected to open a data center
in New Castle that will employ up to 100.
Boyd said banks have an increased need for data security because of
growing concerns about hackers attempting to steal customers'
information for use in identity theft fraud.
In addition, banks have a growing need for data storage, prompting them
to build new data centers, said Richard Purdy, an executive with
Hopkinton, Mass.-based EMC Corp., which sells data storage technology.
Purdy said banks typically see 100 percent annual increases in the
amount of data they generate. Banks' data centers handle both storage
Delaware is a good place for a data center because of its cost advantage
relative to other Northeastern states, Boyd said. The annual operating
cost for a typical bank data center in Wilmington would be about $11
million, compared with $12.3 million in Philadelphia and $14.1 million
in New York City, according to the study. Boyd attributed the difference
largely to lower real estate prices here.
Delaware, long known for credit card banking, also has a skilled work
force with experience in technology and banking, Boyd said.
But Delaware also could see competition from cities in the West and
South. Sioux Falls is less expensive than Delaware, with annual
operating costs for a bank data center estimated at $9.7 million. The
city also has a trained work force available to banks, being the home to
credit card operations of Citigroup and other banks, Boyd said.
Contact Ted Griffith at 324-2880 or tgriffith (at) delawareonline.com.
ANNUAL COST OF OPERATING DATA CENTERS IN U.S. CITIES
NEW YORK: $14.1 million
PHILADELPHIA: $12.3 million
CHERRY HILL, N.J.: $11.9 million
WILMINGTON: $11 million
WINSTON-SALEM, N.C.: $9.8 million
SIOUX FALLS, S.D.: $9.7 million
* The storage to maintain a single bank account has grown to well over
20 times what it was in 1990.
* NASDAQ stock market processes 2 billion contracts a day.
* Visa processes more than 3,500 transactions a second.
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