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Study: Del. a prime spot for financial data centers

Study: Del. a prime spot for financial data centers
Study: Del. a prime spot for financial data centers 

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 
and security.

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)



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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