Hewlett-Packard Co. and SAS Institute Inc., two leaders in data analysis technology, are teaming up to create a data mining laboratory.

Their Data Insight and Discovery Center, in Cary, N.C., is an outsourcing facility that can handle data analysis projects for banks and other companies.

Data mining-the ability to sift, analyze, and act upon vast stores of customer and market information-is gaining in importance as banks encounter increasing competition from nonbank companies. While 17% of banks with more than $1 billion of assets mine data, another 60% plan to adopt or evaluate these systems, according to Mentis Corp. of Durham, N.C.

The laboratory can help banks with customer profitability measurement, risk assessment, fraud detection, and marketing.

Prices for projects at the data center start at $30,000. Analyzing data and presenting reports to clients usually takes four to six weeks, said Dennis Massengill, SAS Institute's manager of enterprise technology partners.

The facility has no clients yet, but several banks have expressed interest, Hewlett-Packard said.

Joseph Haren, senior vice president and chief information officer at FirstMerit Bank, Akron, Ohio, said he would consider using the lab as a way to streamline data analysis.

The $5.3 billion-asset banking company now analyzes its own data using SAS Institute software and Hewlett-Packard servers, Mr. Haren said. An outsourcing service could reduce the time and energy the company must spend on data analysis.

"We could do more analysis if we outsourced it," Mr. Haren said.

Observers said the creation of the lab is a sign that banks are moving beyond basic data warehousing into projects that can have a positive impact on earnings.

"Most banks spend a majority of their money just constructing the warehouse and an inadequate investment in the application software that produces the value," said James Moore, president of Mentis.

Hewlett-Packard and SAS Institute plan to promote the laboratory as a place where financial institutions can get data analyzed from a variety of angles, said Rick Millem, director of marketing solutions for Hewlett- Packard's financial services business unit.

Hewlett-Packard, based in Palo Alto, Calif., will contribute its consulting and integration services, along with its server systems.

Cary, N.C.-based SAS Institute, which has done financial statistical analysis for two decades, contributes its data mining software and expertise.

The laboratory initially will target banks with more than $15 billion of assets. It also will sell its services to insurance, brokerage, and securities companies, Mr. Millem said.

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