Role of Information Technology in Global Banking and Finance

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INTRODUCTION1

Research Questions3

DISCUSSION3

Role of Information Technology in the Field of Global Banking and Finance3

Information Technology and Growth in the Global Banking and Finance Sectors6

The Impact of Information Technology in the Field of Banking and Finance Worldwide7

Impact of Information Technology on the Performance of Employees8

Effects of Integrating Information Technology on the International Banking and Finance Sectors10

Negative Aspects of Information Technology on the Global Banking Industry13

CONCLUSION15

REFERENCES16

Role of Information Technology in Global Banking and Finance

Introduction

Globalisation has initiated strong competition in the industry of global financial and banking services. This competition has made the financial institutions to bring out the best in them (Vasudevan, 2003, p. 36). To stay competitive, the financial institutions must have the flexibility that will help them to respond quickly to frequently changing needs of the market with new products and services. An important challenge for the global banking sector is to meet the customer's expectations (William and Sawyar, 2005, p. 56). There has been a complete transformation in the retail industry of banking. The branch offices were considered to be the icon of banking industry around the globe. The access of consumers to the financial products and services of banks is limited, generally to the hours where the branches were open and the products and services offered by the banks were limited in a relative manner (Shelly and Cashman, 2004, p. 74).

The new competitive pressures are also being applied by the non-banking institutions that provide similar products and services (Sciadas, 2002, p. 29). The consumers are becoming wiser in buying and are less loyal to a specific bank. They have also become more demanding for the services and products that fit in the specific time schedule and financial requirements. In a consequent manner, they have gained a position that dictates how, when and where they conducted their financial affairs (Sciadas, 2002, p. 29). The retail bankers must respond to the market and consumer demands by providing more convenience, greater accessibility to the financial products and services and deliver at a better pace. During this time, the costs of development and operations shall either be reduced more maintained (Rizvi, 2005, p. 12). This is done to maintain or acquire a substantial percentage for the financial transactions of the consumers and establish a profit margin that is acceptable (Press, 1999, p. 32).

Information technology has a major competitive advantage in the global banking industry. During the recent years, banking institutions around the world have been investing aggressively in information technology, as it is considered as the only means to reduce the cost and improve the operations but majorly it is a key to the profitability of the banks (Rizvi, 2005, p. 12). With the adoption of information technology, banks try to improve their management of their customer relations; operations piled up in the streamline, expand activities, improve the services and reduce the exposure to risk during the turbulent markets (Antonelli, 1991, p. 14). A software solution has helped to reduce the delivery of branches ...