Impact of Information Technology on HSBC's Business Operations

This report analyses the effects of information technology on the overall performance of HSBC. It highlights the computer networks used in the company and its impact on the performance of HSBC. It also illustrates the role of artificial intelligence in the entity for the benefits of the business operations in the organization.

INTRODUCTION TO
INFORMATION
TECHNOLOGY

ABSTRACT
The aim of this report was to analyse the effects of information technology on the overall
performance of the organization. For this purpose, the organization taken was HSBC and in the
context of the information technology's role in the organization the scrutiny was taken into
consideration. Further various issues regarding cultural and ethical area of the organization were
thoroughly examined. The report has also highlighted the computer networks used in the
company and its impact on the performance of HSBC. At last, artificial intelligence role in the
entity was illustrated for the benefits of the business operations in the organization.

Table of Contents
ABSTRACT.....................................................................................................................................2
INTRODUCTION...........................................................................................................................4
LITERATURE REVIEW................................................................................................................4
ANALYSIS AND DISCUSSION...................................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
The report of introduction to information technology will comprehensively analyse the
role of information technology in the growth and development of the company. The report will
summarize the contribution of the information technology in the performance of the company.
For this purpose the literature review will be undertaken for the better understanding of the
different types of the computer networks and the contribution it has on the organization's goal
achievement (Naheem, 2018).
For this purpose, the organization taken into consideration is HSBC. HSBC stands for the
Hongkong and shanghai banking corporation, which is a banking and insurance company,
currently having the growing business operations since more than 150 years across the globe. It
is offering its services and business to millions of the people globally (Barber, 2021). This report
will clearly establish the organizational impact of technology for betterment. Different computer
network and artificial intelligence will be evaluated with the context of the organization.
LITERATURE REVIEW
THEME: 1 impact of information technology on business in enhancement of operation:
According to the Kumari and Kumar, (2018) information technology plays a very crucial
role in the banking, finance and insurance businesses. With the rapid changing world and
collaborative working global environment, information technology has become the foundation of
the flourishing business cross boarder. Many business units have developed an edge in the
business using the IT tools and technologies.
Kołodziej, (2021) said that the multinational corporations like HSBC, who are operating
in 64 countries across the globe, have not been where they are without the help of information
technology in the business. A banking and insurance company is majorly impacted by the IT, as
whenever a new technological innovation appears in the market they have to be the first one to
use it for the business as it gives an upper hand to the customer service.
Information technology has revolutionized the banking and insurance sector, as in today's
times banking is on the finger tips of the customers. Various services like opening of the account,
making transactions, knowing the account information, getting a loan everything has become
really easy and accessible. The centralized system of working has been adapted by the banking
companies which gives better services to even the customers in the rural areas.

HSBC has been constantly incorporating the best of the technological tools which
enhances the business of the organization. IT has impacted the business of the HSBC in positive
way. Al-Fedaghi and BehBehani, (2018) It has improved the business dynamics of the company
by developing the best strategies. One of the best impacts of the IT is creation of database,
information tools allows storing the customers pattern of services and storing there transaction
information as it helps in delivering better quality services to the customers.
Also the ability to allow the conduct of financial transactions via online mode even to the
customers who are seating in the remote areas has improved the customer base of the company.
The IT innovations, has helped the HSBC, know the customers expectations which has made the
client requirement easy to serve. It has been noticed that technology is driving force behind
multinational businesses. Company is using many tools like AI, software, automation, data
management, cloud computing, database which are accelerating the growth of the company.
Also, these tools make the cost of operations for offering low priced services really easy which
gives HSBC an edge in the competitive market.
Theme: 2 vitality of social and ethical issues in business operations in the virtual world age.
Timmer and Pierri, (2021) Source established the idea that there are some issues which
are associated with the virtual world. Some such issues are the ethical practices and conducts and
abiding with the social norms, needs and legislation. This has been observed over the years that
corporations that are using the information technology have the hard time abiding by the ethical
norms and are often found guilty of malpractices just for the profit making purposes.
According to the Guryanova and et.al., (2020) there are some negative sides of the use of
the technology such as hacking, breaching, virus, financial and data theft etc. companies to
survive and thrive in the competitive edge often use these malpractices to keep themselves one
step ahead of the others in the industry, there lies a great scope of negative virtual behaviour.
Still, the authorities have established many rules and regulations regarding the IT which are the
code of conduct of the business in the country. Countries are striving to make the virtual world a
safe place for the customers and businesses.
The very first is cyber attacks and cyber crimes. HSBC has more than 40 million
customers across the globe. Company is highly dependent on the information technology to
facilitate the online platform for the customers in different nation. This platform has very crucial
data of the customer and company both. It is important for the company to set the cyber security

which protects any attacks and threat. So this requires the ethical morality on the companies part
to protect the mammoth size of data from the attacks. Also, the cyber crimes like bullying, hate,
trolling needs to be taken care of at the various platforms of the company.
Second is hacking and data breaching, many a times companies face the problem of
website being hacked by the unauthorized people. According to Du and Xie, (2021)Such
unethical practices tries to get the inside information of organization's data. HSBC is working at
the protection of the site to manage the safety of the business data and any misuse of data must
be prohibited.
Third is data mining, banking and insurance companies like HSBC often outsource some
works like selling of products and advertising etc. what happens here is that the outsourcing
companies use the customer data or information to their own benefit by mining of the data which
compromises the privacy of the customer. HSBC has strict policies onboard which protects from
such unethical practices.
Theme: 3 Different types of computer networks and its effects on the business.
According to the Padmaavathy, (2019) there are various types of computer networks
which are used by the companies yet the most used and prominent networks are LAN, MAN,
PAN, WAN. All these networks are highly significant as companies and their performances are
often affected by these networks. The affordability, quality and reliability of the networks plays
an important role in the growth and performance of the company.
HSBC has business operations in more than 64 countries with its headquarters situated in
united kingdom. Kyer, (2019) established the fact that company is smoothly running business in
many Asian, American and African nations. All of these operations made possible due to the
efficient computer networks. Four of these networks hold different operations in the business.
New wireless technology is also supporting the business networks.
Marchenko, (2021) supported the opinion that PAN and LAN hold high importance as
they are helpful in carrying out the business work in easy way. LAN stands for local area
network, PAN stands for personal area network. These are the networks which eases the data and
information transfer with each other. These networks work in the nearby area range exchange of
data. In the absence of these networks it becomes very difficult for the HSBC offices to conduct
the operations.

Further, WAN and MAN stands for wide area network and metropolitan area network.
MAN supports working in the large regions like cities, towns etc. and WAN supports connection
between different areas. This networks helps the HSBC stay connected with the customers and
employees, these networks help company improve the customer service. Easily approaching the
employees for the Efficient working and performance, this networks provide the foundation. In
the old times in the absence of network it used to be difficult to support the rural banking and
banking in remote area but due to the invention of networks it has become really easy for the
companies to serve even the farthest customer.
Theme: 4 impact of artificial intelligence in the improvement of business operations:
Akram, (2021) has highlighted the various ways in which artificial intelligence supports
the business environment and operations. It helps in time saving methods by automating and
optimizing the task and processes. At HSBC business units needs to conduct many processes on
a daily basis and AI helps in taking an easy road of automating the process.
Artificial intelligence also helps improve the efficiency and business performance. At
various levels of the hierarchy it supports and faster the process of decision-making with the help
of the cognitive technology said by the source Alhaddad, (2018). It increases the operational
efficiency and productivity in the business. Baking operations are really sensitive in nature and
any kind of human error may cause huge financial losses to the company. Therefore, artificial
intelligence avoids the chance of human error.
According to Lee and Chen, (2022) it impacts business in positive way by mining huge
sets of data which can grow and serve a large customer base for the company. It also keeps the
record of each customer's pattern of services and usage of banking facilities which helps in
knowing the customers wants and expectations and allows serving the customers in a customized
way.
ANALYSIS AND DISCUSSION
Impacts of information technology on the business for the enhancement of operations.
HSBC is a banking and finance company that is established in 1864. This bank has more
than 219697 employees onboard working in around 64 countries in the world. HSBC has an
annual revenue of 49 billion US dollars. Organization is also registered on the NYSE (new york
stock exchange). Such wast scale operation of the organization is totally backed by the
information technology. The key which is driving the business operations smoothly with having

so much diversified functions, is an efficient information technology system in the corporation
(Rahi, Ghani and Ngah, 2018).
Organization is striving for the greater success with the help of efficient IT support which
has helped in automating the operations. Many IT devices are used for the banking process such
as MICR technology, electronic payment, ATM, phone banking, internet banking etc. the large
scale revolution of the digitalization followed after the IT started in the banking system. This has
made the IT faster and reliable.
The maintenance and retrieval of documentation has become much faster and
comfortable that it was ever before. In banks even the smallest of the transactions needs to be
recorded and those records needs to be maintained forever (Khan and Rabbani, 2021). Therefore,
the technology helps in easy recording, maintaining and retrieval of the information and
documents.
The technological revolution has brought the advancement which allows the banks to
have the database of customers which helps in knowing customers better and serving them in a
customized way for the personal baking. It is the technology which has evolved the concept of
database of customers.
HSBC is a big corporation which faces difficulties in maintaining the transparency of
working. Information technology believes in real time transaction updation to the customers.
Even though the banks are closed people can still send and receive money and incur transactions.
Therefore, it is clear that information technology has positively impacted the business and
operations of the bank.
Importance of social and ethical issues in the virtual world:
HSBC is well-known for its value for money services which are high in quality and
affordable in prices. It has its business operations in more than 64 nations globally. The large
customer base of the company requires to have ethical and social norms adapted in the business
operations. With technology there lies many issues which threatens the company's smooth
working process. The literature review above has mentioned three major issues that exist and if
they kept eye on, these issues may help in imp[roving the business performance (Ruane, Birhane,
and Ventresque, 2019). This can also help in getting rid of the perils in order to develop the
capability to perform better.

cyber attacks and cyber crimes, in banking there lies the threat of cyber attacks on the
banking sites and platforms which may result in to financial loss. Also, there are multiple cyber
crimes like extortion, fraud, personal information threat, account information threat, bullying etc.
such threats make the business really sensitive. HSBC takes measures to protect the business
from the cyber attacks and establish the high cyber security which gains the customers trust and
improves the brand image.
Hacking and data breaching is another big issues for the banking company as
customers use mobile phones and banks applications to make the transactions and this generates
the threat of hacking the website which breach the customer data and affect the ease of
transactions for the customers, further it may cause the financial losses on the banks part.
Therefore, HSBC has created high security on the website and applications which can not be
affected by the hackers. Such strict security policies and measures brings high net worth
customers onboard which enhances the profitability of the business.
Data mining in today's virtual environment is quite prevalent, many small companies
uses the big company's data for their own business development. Like when you brows on one
site you may get the advertisement for things from another site you may have visited in a while.
So the source that gives the information of customer's browsing history is known as the data
mining. HSBC does not support data mining of their database in form which improves
company's moral practices.
Different computer networks and it's impact on the performance of the organization:
Networks play an important role in the business of the banking company. As HSBC has a
customer base of 40 million across the globe, the company needs to have a well-connected
network which is feasible for the customer's services and employees working. At HDBC there
are various types of networks used which needs to be working in the collaboration to deliver the
best inputs (Vybornov, Miloslavskaya and Tolstoy, 2020). Company has a strong IT strategic
team which determines the network related requirement for the company.
In the broad aspect there are majorly, WAN, MAN, LAN, and PAN are used for the
effective business operations. WAN is the wide are network covers a country, city, town. It has a
high speed for the exchange of the information and data. Companies often use this network for
the customer's services. Further there is MAN which is a metropolitan network which serves
basically as the name suggest in the cities. It is used via Ethernet and ATM. Next is the LAN,

which is local area network, this is a network spread inside the building or the premises which is
generally used to connect in the office for the easy working environment.
Also one of the most recent networks which is being used by the banking companies is
the VPN. VPN is the virtual private network, it helps in the online business management for the
business operations of the bank. Public can connect to a private network of the bank via this
network. Majorly for the employees, connecting data flow through various branches to execute
daily function in the bank WAN is used in HSBC. These networks play a very important role for
the banking operations as inside the banks it maintains harmony of working and for the
customers it makes even the remote banking customers easy. HSBC is targeting the rural
audience for the banking and these networks are the major means to keep the smooth banking
services for every customer.
Impact of artificial intelligence in enhancement of the business operations:
Artificial intelligence has benefited the banking industry in so many ways by bringing
advancement of the processes. Yet the major role in the enhancement of the business operations
has been the risk management. AI has improved the risk management in the banking sector really
easy.
HSBC bank employs AI powered solutions which can analyse the data which in large
volumes. Analysing these data is almost impossible manually. AI powered solutions can easily
and quickly analyse the data and find out the pattens and trends in the customers which savers
the banks from potential defaulters of the loans (Gallego-Gomez and et.al., 2020). The credit risk
is the biggest source of potential losses for the banks and artificial intelligence helps in
identifying those individuals and businesses people who may default in the obligation of
repayment of the loans.
In the old times bank employees manually used to determine the credit score of the
individual and business for the purpose of sectioning the loans and it used to be a hectic process.
Still banks used to suffer from the large number of non-performing assets. The introduction of AI
has been a boon for the banking industry. Apart from this, AI also helps in identifying the
product and services which have potential of sales to the customers. It helps in identifying the
right products for the customers according to the needs and expectations of the customers, based
on the analysis of the data. Overall AI helps in fostering the business operation in smart way
which enhances the banking operations.

CONCLUSION
The above report of introduction to information technology has summarized the role of
the information technology in the business. Report also identified various social and ethical
issues like cyber attacks and hackings which exist in the virtual businesses. Further report
identified the impacts of the IT in the enhancement of the operations. The organization taken in
the report was HSBC which is a banking corporation. Also, the computer networks role in the
business has been shown. At last the artificial intelligence being a major factor in operational
enhancement of the business in the banking sector has been brought to the light.

REFERENCES
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