Data centers give boost to lenders, device makers

Eleven years after Agricultural Bank of China Ltd moved its data operations and maintenance from Beijing to Shanghai, the average number of transactions per day has grown significantly.

In the first half of 2018, the number rose 26.87 percent year-on-year to 500 million. It has increased by more than 20 percent every year since the data center of the nation's third-largest State-owned commercial lender by assets started running 24 hours a day, seven days a week in Shanghai on May 26, 2007, according to Sun Jun, a senior logistics manager at the center.

Located in the China (Shanghai) Pilot Free Trade Zone, the data center connects 36 tier-one branches at the provincial level, 18 overseas institutions, and more than 23,000 operational entities of the bank.

Domestic manufactured products accounted for 45.75 percent of the 341 network devices deployed in the production network of the data center at the end of June 2017, according to the bank.

The center uses routers and switches produced by Huawei Technologies Co Ltd and Cisco Systems Inc, and intrusion detection and prevention systems made by the Beijing-headquartered Nsfocus Information Technology Co Ltd, an internet and application security company.

Its firewall devices are made by Neusoft Corp, a Chinese provider of software engineering and information technology services; Hillstone Networks, a Beijing-headquartered provider of network security solutions; and New H3C Group, a digital solutions provider and a joint venture between Unisplendour Corp and Hewlett Packard Enterprise Co.

The most important pieces of equipment in the center, however, are four IBM z13 enterprise mainframe servers and two coupling facilities. Each of the IBM mainframes cost 1 billion yuan ($151.24 million) after its processor speed was upgraded.

"For the purpose of disaster recovery, our bank is building a data center in Beijing, which is expected to be completed by the end of this year," Sun said.

The Beijing center will serve as the backup, along with a third data center that was also built in Shanghai.

On Sept 3, the bank performed an exercise on switching data operations from Shanghai to Beijing. It took 61 seconds to switch and 56 seconds to switch back, much quicker than the requirements stimulated by China's banking and insurance regulator.

Asked about whether Agricultural Bank of China will consider setting up a subsidiary providing services to other financial institutions to fully utilize its hardware and information technology capabilities, Cao Jun, general manager of the office division of the bank's data center, said it is a trend; and part of the reason is, compared with its parent bank, the subsidiary could offer higher salaries to IT professionals, in line with the market's competitive forces.

"China Construction Bank Corp has already established a wholly-owned fintech company. Other banks may follow in its footsteps," Cao said.

Apart from serving China Construction Bank and its subsidiaries, the fintech company will export technology capabilities to external financial institutions. Its business scope includes software technology, platform operations and financial information services.