Information Technology for Business Banking and Finance Industry

Question: Discuss about the Information Technology for Business. Answer: Introduction: Information technology has completely shifted the paradigm of the banking and finance industry in terms of its performance and service delivery to the customers. The banking and finance industry have heavily invested in information technology in order to maintain balance with the development at global level, improve quality of service delivery for the customers and reduce overall transactional costs. IT has also enabled delivery of various value added services and products at wider level (Bushman, 2014). IT has developed more user friendly and flexible services for banking and finance industry. IT has emerged as heart for banking and finance industry while this industry becomes heart of entire robust economy. This has created new infrastructure for entire global economy and with use of new technology has also given competitive advantage to the industry. IT has revolutionised the financial transactions of this industry and their ease of use has also enhanced its significance in the ba nking and finance industry. Importance of IT for banking and Finance industry survival: The competition in banking and finance industry is rapidly increased in present times. To survive and remain stable in this changing marketing conditions, banking and finance industry are emphasised to use IT and latest technology which can help this industry to have flexible and robust structure that can able to cope with the changing scenario of the markets (Chae et al, 2014). IT is also emerged as the significant tool for reducing cost and enhancing communication with users or customers which are associated with banking and finance industry. Technology has always played vital role in working operations of banking and finance industry and services offered by this industry. IT has enabled development of sophisticated products or services, better infrastructure of market and implements reliable techniques which can control risks associated with the banking and finance industry. IT has also helped this industry to reach to more diversified markets and geographically distant locations. The delivery channels of various products or services for banking and finance industry has also significantly enhanced by IT (Davenport, 2013). IT has also moved this industrys back operations to primary factor and has enhanced importance or value of this industry across the globe. The various measured are adopted by banking and finance industry using IT for their survival and stability like strengthening infrastructure of this industry in terms of security, communication or networking, moving towards environment of RTGS, achieving connectivity on inter branch basis, using MICR technology to clear cheques on quick basis and many more. Requirement of IT applications in banking and Finance industry: IT has played a huge role in enhancing business operations of the banking and finance industry all across the globe. The effective implementation of IT in this industry requires certain factors like cost, designing, planning, equipments, installation, training and many more. IT requires huge investment to implement these systems in the banking and finance industry (Fonchamnyo, 2013). This industry is mainly serves as the service industry and requires large amount of information in order to provide their products or services at wide range. The information systems needs to de designed in such manner so that can store all information of customers and to use that information for administrative purposes as well. There should be proper planning to implement information system in this industry which includes management information system, IVR systems and other customer handling systems as well (Gai et al, 2015). This all systems work on the IT and require appropriate hardware or software packages in order to implement effectively in the industry. There should be effective software packages for installing all the IT systems in the banking and finance industry. Further, proper training to the employees or management in order to handle various IT systems is also required so that effective adoption of IT in this industry can take place. This is generally robust process which requires enough support and maintenance in order to control the entire system in efficient manner (Inukollu et al, 2014). These will also helps to reduce overall operational costs of this industry and also helps to enhance business operations of banking and finance industry. Uses of IT in banking and Finance industry: IT has changed the entire functional structure of the banking and finance industry. It has strengthened the internal as well as external structure of this industry. The use of information system has reduced the burden over the employees to store large amount of database on the manual basis (Joshi et al, 2014). The employees are also using different software packages in order to update the systems on regular basis which also avoids any possibility of the privacy or security concerns of this industry. The use of CRM system has also enabled the industry to enhance their relations with the customers and suppliers. The use of advanced accounting systems has also made all the transactions so quick and real which reduced overall cost structure for this industry (Kaye, 2014). The use of IVR services in order to provide quick services to the customers has also reduced lots of operational and functional stress of the employees that has also helped them to enhance their decision making capabilities and skills. In the same manner, the customers and suppliers are also efficiently using various IT systems in order to get quick and efficient banking and financial services. IT has enabled the customers to use banking or finance services from any part of the world and get their desired products or services (Lau et al, 2013). IT has also enhanced the real time management of funds or money of the customers or suppliers. The availability of ATMs and other financial services has also strengthened the use of IT in this industry. This has also enhanced online purchasing of the products or services using the online payment system which are given by this industry. The quality and quicker customer services have also enhanced the satisfaction and experience level of the customers by enabling IT in the banking and finance industry (Wang et al, 2014). The IT has also strengthened customer relation of this industry by various ways like use is easier, enhanced confidence of customers, providing online resources, various relationship services and many more. Benefits provided by IT in banking and Finance industry: Information technology has helped the banking and finance industry in enhancing business operations and economical feasibility of this industry in a huge manner. IT has helped this industry to enhance their profits level and also helps to increase their overall revenues. The operational costs of this industry has been reduced immensely by adoption of IT in the banking and financial systems (Martins et al, 2014). The transactions can be effectively promoted with the customers within same banking network by using the information technology. This has also provided a flexible and robust structure to the banking and finance industry so that can easily cope with the rapidly changing marketing conditions all across the globe. The excellence in the operational activities has also provided by the information technology systems with fewer errors and least operational time to provide the quality services to users and the customers. This has also helped the banking and finance industry to adopt more business initiatives like customer relationship management (CRM), Enterprise resource planning (ERP), automated sales and many more. The supply chain activities of the banking and finance industry can be easily handled by the information technology systems tracking or controlling inventory or information of the business operations (Murphy et al, 2014). The IT also provides all the relevant information of customers, competitors, suppliers or competitive environment to the banking and finance industry so that can necessary steps in order to cope with all these problems. This has makes the decision making process more flexible and faster which helps this industry to provide effective and quality services to all their users and customers. Potential risks of IT: With emergence of information technology in the banking and finance industry, it has also created some major threats to this industry in terms of privacy, security and confidentiality. The availability of data stored on the computers is now can be displayed on ATMs, internet or mobile banking which has severally raised the issues of confidentiality or privacy of consumer or banking data (Obay, 2014). The processing capabilities of the data for the computers related to integration, retrieval and rapid throughput capabilities has raised the doubts among the users regarding the privacy of personal information of the users or customers. The use of cloud computing technology in the banking and financial industry has also enhanced real time risks to the data of this industry and risks of data theft and hacking is always in there using this systems. The cases of cross referencing of the data for creating detailed dossiers of the individuals have also enhanced the privacy problems in the banking and finance industry. If the individual data remains available to the concerned authority then there will be no problems related to data privacy may be happened in the banking and finance industry (Okiro and Ndungu, 2013). The customers or users also feel threatened regarding the inadequate facilities for the privacy maintained or controlled by the banking and finance industry with respect to their money transactions and links on the computerised systems also dealt with the suspicion. The data provided by the customers or users to the banking and finance industry should only be used for the intended purposes without avoiding concerns related to data privacy or security (Wagner et al, 2014). The banking and finance industry is also affected by the issue of hacking and security theft in recent times which has also affected the business operations of this industry. Maintenance and monitoring IT: The maintenance and monitoring of the information technology systems in the banking and finance industry is really a huge and tedious task. The maintenance of IT requires huge investment and capital in order to control all business operations of banking and finance industry. A system of fraud monitoring needs to be implemented in this industry in order to avoid all the issues related to frauds or unauthorised activities in the IT system of banking and finance industry (Setia et al, 2013). The IT system needs regular update of their software packages in order to avoid any malfunction in business operations of the banking and finance industry. The proper surveillance and firewall system needs to be implemented in the banking and finance industry in order to avoid any security theft or cyber attack. The update of IT system is quite easier as compared to other systems and also not requires more time. The database of users or customers needs to be maintained on continuous basis in order to provide better services or products to the customers according to their financial conditions. IT also provides monitoring on real time basis using the clod computing technology which also enhances satisfaction level of customers for the banking and finance industry (Shaikh and Karjaluoto, 2015). There should be separate team for the maintenance which includes IT resources and managerial aspects. The system administrator will help to monitor and maintain all the database of the banking and financial industry. A troubleshooting applications needs to be built in IT systems so that can provide system alerts, traceable logs, monitoring tools and activity reports in order to control the security of IT systems for the banking and finance industry (Vander et al, 2014). The upgrades of systems needs to be done in such manner that will not impact resource files or data and at the same time, also preserves customer settings and configurations data. Conclusion: Information technology provides various opportunities and enormous potential to the banking and financial industry. This provides rapid, systematic and cost effective services to different users and customers. This has also enhanced transactional volumes and customer base for the banking and finance industry. This has certainly revolutionised the business operations and functions of banking and finance industry all across the globe. The concept of direct banking and virtual banking is gaining more importance all across the globe. IT has helped the banking and financial industry to provide their services or products using the channels of electronic media without need of physical branches. IT has also helped this industry in reducing manpower and maintenance costs which has enabled this industry to provide more competitive prices for products or services. The appropriate cyber or IT laws needs to be used in order to avoid any data privacy, confidentiality or security threats for the us ers of banking and finance industry. Recommendations: From the above discussion, one can recommend a flexible, reliable, and cost effective IT structure for different operations and functions of the banking and finance industry. The strategy adopted for the IT systems needs to be aligned with strategies of banking and finance industry for their business operations. The risks related to technology which includes cyber risks needs to be considered in the same manner by the banking and finance industry like the operational risks, market risks or credit risks in order to enhance business operations of this industry. The implementation of new devices for solving problems of industry needs to be given sufficient attention in order to gain more advantages from the information technology. This vulnerability generally includes hardware, software, applications, operating systems, network devices, and many more. Further, the security systems at the banking and financial industry needs to be improved in order to avoid any issues related to the security, privacy and confidentiality of the data. 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