After knowing about effect of Information Technology, now banking and finance industry is also getting modernized in technology usage. That is why now this industry wants to implement Information System into banks and finance institutions to perform various important tasks of customers in secure and reliable ways. In most of the private banks use of Information Technology application and software solutions has become common and due to this, customer service in these banks is better and quicker than other banks. That is why, all banks should use information technology applications or software solutions to perform its regular activities. IT offers centralized approach to banks and finance sector and due to this it become easier for customers to access information, deposit amount and to perform other bank and finance related activities. IT solutions are provided by IT companies to banking and finance industry in form of services to help customers and to provide them satisfactory services. Besides this, various other requirements of banking and finance industry are fulfilled by Information Technology applications.
It is an important segment of report to discuss in detail about importance and impact of IT on Banking and Finance Sector.
Yes, banking and finance industry has need of IT to perform its different operations. Today, due to advancement of Information Technology (IT) everyone is using IT devices and applications such computer devices, mobile phones, smartphones, laptops and other devices for communication and information sharing. In this case, by implementing IT into banks and finance industry, it will become easier to provide online banking and finance services to customers both at local and remote locations. Besides this, it is also an effective way to get rid of conventional ways to perform banking activities such as information storage, access and transferring information. Online service of banking and finance sector will allow users to collect information about their bank account and financial statement online without visiting to bank. It is a time saving option for both banks and its customers. That is why, there is requirement of IT in banking and finance sector (Ramey, 2017).
Information Technology is important for banking and finance industry to enhance its performance and to provide quick and satisfactory services to its users. IT has digitized and networked banking and finance services and due to this management of banking and accounting systems has become possible. Here we have some essential reasons that shows importance of IT in banking and finance industry (Smallbusiness.chron.com, 2017).
If we talk about finance sector then due to following reasons IT is considered important here:
Due to these reasons, most of the financial institutions wants to implement information technology applications to perform their essential operations.
Information Technology systems or its applications have some requirements that must be fulfilled before start its implementation. In this report, we will emphasize on these requirements in detail. The list of requirements consist of cost, planning, hardware and software components, training and installation (Poonegar, 2017).
Cost
The most important requirement of IT is cost. If banks and financial institutions have appropriate funds only they can implement IT according to their infrastructure. According to analysis, the estimated cost of IT is about $80,000 or more than this. It will depend on requirements and demands of banks and financial institutions. That is why all funds should be available on time.
Hardware and Software Components
These components are required for implementing IT applications in reliable ways. In overall functionality of IT systems, these components contribute a lot. The hardware components include hard drive, CPUs, monitor, graphic cards and other additional devices according to requirement for storage purposes. The software components include operating system, memory, drivers and third party solutions for security and privacy purpose such as anti-virus etc. Lack of these components lead to problems and errors into system (Pioneerjournal.in, 2017).
Planning
Planning process is important before start implementation of IT in an organization. In this planning process, all essential requirements are identified that are required for appropriate implementation of IT. The main factors of planning process are cost and time estimation, identification about hardware and software components of systems and requirement of training process etc. Every specification of hardware and software components is clearly defined in planning report. The implementation process of IT in banking and finance sectors should be implemented on the behalf of planning report.
Training and Installation
The basic knowledge about Information Technology and its applications is necessary for its users. Otherwise, they can face some problems to perform their operations. It is possible that in banking and finance sector some of employees may belong to non-IT background and have less knowledge about usage of IT applications. Therefore, training is required for those employees so that they can use these IT applications and systems properly to get better outcomes. Besides this, installation of IT solutions into computer systems is very important. Improper installation of IT solutions or components may lead to system error.
In banking and finance sector, Information Technology systems and applications are used at both external and internal levels. At external level, IT applications are used by banking and finance customers to collect their financial information. From banks, they collect information in form of bank statements and in case of finance industry they can know about their shares and information about finance market (tieto.com, 2017).
On another side, at internal level, employees in banks and finance industry uses IT to perform its different operations. In banks, IT applications are used for storing personal and financial information of customers that can be provided anytime to them on their demand or they can also access it online by using banking information system. IT is an inexpensive technique as compare to other conventional technologies that were used in banking and finance sector. In finance sector, at internal level, IT is used to obtain broad and secure information network and this network provides valuable information regarding finance sector. In this, social media applications also play essential role to provide appropriate information to finance sector (Ramey, 2017).
Information Technology has some key benefits and advantages in Banking and Finance Sector that are listed as below:
With benefits and advantages of banking and finance sector, there are some risk factors that associated with IT. The main risk is related to security and privacy of data. As we know that in banks and financial institutions financial information about customers is stored. Therefore, hackers always try to hack this information to get money or to leak it to others. If this information will be misused by hackers then it will cause problems for customers of banks and financial institutions. Hackers implement virus attacks on information systems or databases to get information and these attack are so vulnerable and can damage whole database. The main reason of security and privacy risks is improper usage of security tools and techniques by technical experts in banking and finance industry. Besides this, at developers’ end IT applications are developed on behalf of weak algorithms. These weak points are opportunities of hackers to access important information in unauthorized way (Francis, 2017).
To control above discussed risks factors of IT in banking and finance industry, security tools and techniques should be used. Antivirus, firewall, encryption techniques, strong algorithms and security patches will be helpful for this industry to handle strictly control above discussed risk factors. Anti-virus and firewall software will be helpful to protect system from attack of unknown entity. Encryption techniques can be used while doing coding by developers to secure information into database in more secured form (So Opinionated, 2017). Besides this, strong algorithms should also be used by developers to maintain high level network security (Ralabandi, 2017). For network monitoring, tools can be used that monitor network at periodic basis. In this way, by using above discussed techniques of security and privacy, banking and finance industry and other industries can monitor IT (Iowa City, IA Patch, 2017).
Conclusion
After this whole discussion, we conclude that for banking and finance industry IT is very important. IT provides a secure and reliable way to manage confidential information of customers. But implementation of IT has some requirements to fulfill that we have discussed in this report, security issues and their solutions must be considered seriously at users and developers ends to get desired results from IT applications and systems. All those industries those are working with Information System and other IT applications, they should be aware about these discussed aspects about IT.
References
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Francis, A. (2017). Role of Information Technology (IT) in the Banking Sector. [online] MBA Knowledge Base. Available at: https://www.mbaknol.com/business-finance/role-of-information-technology-it-in-the-banking-sector/ [Accessed 25 May 2017].
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