Introduction to Information Technology: Impact on Businesses and Ethical Considerations - HSBC Case Study

This report discusses the impact of Information Technology on businesses, with a focus on HSBC bank. It covers the importance of IT in helping businesses, ethical and social issues, types of computer networks, and the impact of Artificial Intelligence. The report also evaluates the prospective advantages and drawbacks of HSBC's IT investment.

INTRODUCTION TO
INFORMATION
TECHNOLOGY

ABSTRACT
The following report discusses the concept and impact of Information Technology that is
an essential necessity for businesses all over the world to survive and succeed. The report also
talks about the increasing significance of the relative social and ethical issues over worldwide
business operations. Some issues crucial for business efficiency are also discussed. The
identification, discussion and evaluation of the different types of the computer networks used by
the chosen organization are also included. Furthermore, the impact of artificial intelligence is
also analyzed. All of these aspects are analysed in the context of HSBC bank organization.

TABLE OF CONTENTS
ABSTRACT.....................................................................................................................................2
INTRODUCTION...........................................................................................................................4
LITERATURE REVIEW................................................................................................................4
Theme 1: Impact of IT in helping businesses..............................................................................4
Theme 2: Importance of the ethical and the social issues............................................................6
THEME 3: Identification and discussion of types of computer networks and their impact........7
THEME 4: Impact of Artificial Intelligence................................................................................8
ANALYSIS AND DISCUSSION...................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Information Technology commonly known as IT is described as the efficient use of
electronic and technological systems that generates, compiles, shares, and processs data. With
the increasing rate of growing industries in all sectors and segments, the role of IT is also on the
rise which has made almost all businesses dependent on the information and communications
system (ICT). It is mainly used in business organizations with primary focus on electronic data
monitoring and information management. In simple terms IT has a crucial role in the modern
context of running business firms with variations such as artificial intelligence (AI) driven
commercial pursuits (Ptitsyna and et.al., 2019, October).
The following report will elaborately discuss the concept, role, and importance of the IT
sector in the context of HSBC plc bank. Headquartered in London, UK, the HSBC Holdings plc
is a multinational bank known for its universal fiscal and financial services. As per the 2021
statistics, HSBC bank's monetary assets amounted to over US$2 trillion under both custodial and
administrative dominions. The report will discuss the impact of IT on such a large bank holding
and will explore the social and ethical factors associated with it. It will also identify the different
computer networks and will examine AI's impact. It will finally analyze the prospective
advantages and drawbacks of the firm's IT investment.
LITERATURE REVIEW
Theme 1: Impact of IT in helping businesses
According to Salahshour Rad. Nilashi. and Mohamed Dahlan., 2018, information
technology is a very essential aspect that impacts the working of an organization or company at
certain levels. Also, the sector has evolved immensely through the last decades. Due to several
reasons this sector is considered essential for an organization. The key reason due to which IT
sector is very essential for an organization or company is its positive impact over the growth and
the revenue generation ratios of the company in particular. Also, information technology enables
the businesses or companies to attain greater or wider reach within the market. IT sector
implementation and application into companies has made doing business in different countries
much easier in comparison to what it was earlier or prior to application of IT into business.

Information technology does this through providing the companies with options like websites,
emails, applications, instant messaging and texts, also, these techniques improve the
communication process of the companies throughout the world more effective and less time-
consuming than it was before the IT emergence era.
As per Hanafizadeh. Ghandchi. and Asgarimehr., 2017, a particular business or company
only becomes successful when it knows the strategies and techniques or ways of marketing that
are best, most suitable and appropriate for the business. These strategies differ from business to
business as each business has different and diversified functions and working techniques.
Marketing sector has evolved enormously due to implementation of the IT sector within the
businesses. This is because due to application of information technology within a company the
marketing of the products as well as the services of the company is now done digitally, which
can also be stated as digital marketing, this concept or approach has supported the business or the
companies that have implemented efficient and effective IT strategies and marketing strategies to
grow immensely. This is because the sales of the products are enhanced through the digital
marketing which in turn increase the revenue generation of the businesses too. The
implementation of information technology has also helped the companies in making better
decisions that are less time-consuming as well as cost-efficient too. Through this the companies
or businesses are also able to solve complex problems in the best and easiest way possible and
also improvize the efficiency levels of the company. For an instance people or individuals had to
visit grocery stores or other shops for purchasing the product that they required, but due to
application of information technology the people can also buy products and groceries of their
requirement by being anywhere and remotely too. Through this the people also get inclined
towards the companies that provide such services and also such developments help in enhancing
the customer base and goodwill and reputation of the company in the market. This is all because
of the IT developments and changes that are made by the company. Also, through IT companies
are able to work more collaboratively as different companies in different locations are able to
collaborate by using the cloud computing system. This has also increased employee productivity
within the company and also enhanced product efficiency. All of this leads to growth,
development and expansion of the operations of the company and the company as a whole.

Theme 2: Importance of the ethical and the social issues
According to Sargolzaei. and Nikbakht., 2017, the social as well as the ethical issues are
a major part that play an essential role in either growing the company or vice versa. These issues
are basically a guide or a code of conduct according to which the employees, other stakeholders
and the overall company's working is done. There are numerous social as well as ethical issues
that an organization or company can focus upon, but not all the organizations imply each and
every issue within their organization. For example if a bank that has its own application through
which transactions can be conducted by the customers remotely, then it has to put into
consideration the ethical issue of keeping the personal information of the customers safe, but this
issue is not so important for a paper production company, hence, each and every issue does not
necessarily have to be considered by each and every organization. The issues that are important
for the organization in accordance to certain aspects of the organization such as its employees,
products and services provided, location, reach, target audience, etc. ned to be considered before
implementing the ethical and social issues that will impact the working and the overall
organization. Some social and the ethical issues are discussed further, with the impact, need and
importance these issues in particular hold within the organization or company.
Royakkers. and et.al., 2018 states that the major social issue that is faced by most of the
organizations in the present time due to moving towards a more digital or virtual approach is the
misuse of the personal information of the individuals. This is because the customers input their
personal details whenever they do any purchases or even at the time of conduction of any
transactions, the site asks for basic details or information like phone number, name and email
and at times asks for core personal information such as bank account number or other account
details, hence, it becomes the responsibility of the company to keep the details given by the
customer safe and protected, and if the company does not do so serious legal actions are taken
against the company. But if the company does so, it increases customer reliability and trust
towards the company, also it increases the goodwill and recognition of the company in the
market, which leads to increased customer base and more revenue generation.
Another issue which requires more focus is lacking oversight and acceptance of the
responsibility. Many companies that are in a market are a hybrid stack, meaning they are a blend
of different companies, which is they are not one, but a bunch of different companies. Due to this
it becomes difficult to understand the responsibilities that each of the company in particular has,

this leads to confusion and chaos between companies which further leads to conflicts and issues
on major levels.
As per Mason., 2017, the society constantly is provided with information and it is
obviously tough for the people to categorize the incorrect and the correct information. This is
because of the presence of internet within the society. Hence, the privacy invasion rate and the
identity misuse is extremely high in the current times. Due to which it is necessary for companies
to be precise about the information and details they share with their customers and the market.
THEME 3: Identification and discussion of types of computer networks and their impact
Anayo. And et.al., 2021 states that the major computer networks used within the
organization are many. This is dependant upon the differentiated features and functions of the
organization in particular. The computer networks that are mainly used by the companies are
WAN, LAN, MAN, SAN and many more. The further discussion will mention the above four
and present a detailed description regarding their use and the impact it has over the companies or
businesses. Local area network, whose abbreviation is LAN, means a computer network that
only connects the devices within a limited geographical area or range. This range generally is
from few hundred metres to few thousand metres.
Metropolitan area network (MAN) is said to be a combination of LAN's that are
interconnected, within a specific metropolitan area and follow essential network protocols. This
network in particular can be applied from the width of 5 km to a width ranging to 50 km.
Through this the company is able to share regional resources. It is also cost-efficient and keeps
the data and information highly protected or secure.
SAN, storage area network refers to a network whose primary purpose or motive is to
allow the devices for accessing the data pools. This computer network has a high transfer rate
which generally ranges between 2 and 128 Gbps. Through this the company is able to migrate its
workload seamlessly and this also doe not cause any disruptions in the underlying systems.
As per Yang. and et.al., 2019, wide area network that is abbreviated as WAN, is the most
geographically extended networks among all the other networks. This network is so wide that it
can even connect devices across different continents. Through implementation of WAN the
company's overall capacity is boosted due to aggregation of transportation and reduction of costs
because of using internet services.

THEME 4: Impact of Artificial Intelligence
Dick., 2019 states that AI an abbreviation for the term artificial intelligence basically
means the simulation of procedures or processes related to human intelligence by the usage of
machines and specially by the usage of computer systems. Artificial intelligence is a very vast
range, sector or branch within the study of computer science. Artificial intelligence is basically
divided into four major categories, self-aware AI, theory of mind, limited memory machines and
reactive machines. The main motive of artificial intelligence is to be make working effective
which means, save the time and the money through automation and optimization of the tasks or
processes that are routine in nature. Through this artificial intelligence impacts the working of a
company or organization in a major way. Through artificial intelligence implementation or
application employee productivity levels within an organization also increase and this also
enhances the efficiencies of the operations in a company too. It also supports and plays a major
role in the process of decision-making and makes the procedure less time-consuming and more
accurate and on point too.
According to Ertel., 2018, artificial intelligence plays a major role in enhance of the
overall business and also in supporting or backing up major activities of business. Through
implementation of artificial intelligence the functions, features and overall performance of the
business is enhanced. This also leads to optimization of the internal business operations of a
company, supports automating the tasks for betterment of the company as well as providing
more time to the employees for being more innovative and creative, supports or helps in
betterment of the process of decision-making, creating new and demanded products and better
customer services for increasing the customer base and goodwill of the company and in turn
achieve the end organizational goals of the company through implementing artificial intelligence,
also, it supports the process of optimization of external operations that include marketing of the
products or the services and sales of the products or the services, it also helps the companies in
persuasion of better as well as new markets according to detailed evaluative research and
according to the products supplied by the company, the target audience and other necessary
factors, reduce the head count by the procedure of automation and lastly helps in capturing the
scarce knowledge that is needed in different aspects in a particular time and situation or during a
particular project. Artificial intelligence also has its own set of challenges such as the
technologies used for artificial intelligence can be expensive and immature at times, expertised

employees are required, lack in the process of understanding of the technologies can hinder the
performance of the employees, etc.
ANALYSIS AND DISCUSSION
The levels of competition within the banking industry or sector throughput the world has
been increasing rapidly and consistently through the last decades. Also, due to the consistent
levels of technological advancements all over the world the banking sector is also forced to
change in accordance to it like other sectors of the society. This is to enhance and improve their
position within the market and increase their customer base and target audience through
providing the best and the most advanced services to their customers. Banks like HSBC bank are
consistently adopting and changing according to the technological advancements done in the IT
sector, to offer the best products and most accurate and efficient services to their customers
(Mtsweni, Mokwena, and Moeti, 2021). By using the advanced technologies, HSBC has
provided e banking services to their customers. E banking services allow customers to conduct
banking transactions by being at any location which means conduction of transactions can be
remote. HSBC has implemented this technology through evaluation of the market and customer
requirements, implementation of IT accordingly and then providing knowledge to the employees
regarding the new technological advancements. This advancement within the company supports
in the enhancement of the satisfaction levels of the customers and also increase in the number of
customers that are interested and inclined towards such advanced services.
IT also supports the bank in determination of the data or information regarding its
customers that are present within the market. Through this the banks can improvize their
customer relations which will further increase their support in any further changes in strategies or
techniques implemented by the company. Through this HSBC bank's profitability and revenue
generation will also be increased (Chen, Biswas, and Talukder, 2022). Through the use of IT
HEBC bank is able to manage and organize the documents and the information of their
customers in an efficient and accurate way. IT has also increased the automation processes and
also the employment levels have reduced as the company is using software now.
For HSBC bank it is essential that the company eliminates some ethical issues that are
present and faced by the organization (Paspalakis, 2018). As the bank has implemented the use
of e banking for its customers, the customers are able to conduct transactions remotely, but for
that they need to enter their personal information like, account number, PIN code and other

account details in the application provided by the bank. With this comes a responsibility for the
bank in particular to not misuse the information provided by the customers. Through IT it
becomes very easy for the bank to misuse the information of the customers. But to maintain and
enhance the goodwill and market recognition of the bank, the bank needs to make the customers
believe that the bank is reliable and trustworthy.
Other issues that are identified to impact the HSBC bank are, usage of artificial
intelligence and usage of hybrid stack. Through the use of hybrid stack there is development of a
lot of confusion among all the companies or parties and also this leads to conflicts and chaos. It
also gets difficult to understand who will be held responsible for which activity in particular by
the organization (Seidmann, Jiang, and Zhang, 2020). As per the case of artificial intelligence, it
made automation of large number of business operations possible. This automation affects the
employment opportunities as they reduce within the organization. Hence, implementation of
artificial intelligence is considered to be an ethical issue.
The advent of technological innovation has immensely affected almost every industry. Bank
holding and financial firms such as HSBC Holdings plc has an extremely extensive reach of its
daily business activities. In its capacity as one of Britain's largest bank organization, the
company inevitably uses the much needed support of the information and telecommunications
sector. There are a lot of ways in which banks like HSBC carries out its business activities by
relying on IT such as in the form of internet banking, e-commerce, etc. It has both good and
harmful repercussions (Golosova and Romanovs, 2018, November).
Advantages
 Over the years HSBC firm has built a strong and resilient global network of its financial
services by connecting to international banking customers to broaden its economic perks.
This became a convenient form of transferring funds and conducting transactions through
mobile and net banking. This helps facilitate availability of bank and monetary services
24/7 without the need of any physical bank visits. Both local and global clients can easily
access and view their transfers even on holidays and off days. Online services like e-
portals or Artificial Intelligence powered devices and applications make the loan and
investment options simple to reach.
 Computer networks like LAN (local area), MAN (metropolitan area), and WAN (wide
area) are mainly generated by the intranet and internet systems of HSBC's IT panels.

They connect the devices within a geographical limit that is limited. This range goes from
a width of few hundred metres to a width of few thousand metres. Operating through this
can make a company more productive, through much faster and more personalized
customer services through emails, chat or web-forms. Remote and on-site access to all
the information and data of the business can be made easy through video-conferencing
and video-scheduling that benefits both company and customers (Kolodiziev and et.al.,
2021).
Disadvantages
 Although there are multiple advantages of electronic banking and IT operations, still the
HSBC company and both its domestic and international customers might face numerous
drawbacks of using IT tools. One of these can be attributed to the user's limited or lack of
knowledge of using electronic devices or apps failing which these sevices cannot be
properly availed of. This is why most of the bank sites already have an in-built
demonstration of how to access online banking services that are displayed in a step-wise
manner. An adjoining disadvantage is an altogether absence of internet zone connectivity
or poor network access (Arora and Nabi, 2022).
 It is true that online and net banking makes transactions and fund transfer easier than ever
but one of the biggest concerns is the threat of security breach. Certain data protocols are
evidently present in the net distribution channels but banking becomes disadvantageous
when servers crash or when the customer bank accounts fall victim to notorious hackers.
This is linked with yet another variant of cyber security risk which is password and
credentials security. When a company user or bank client types in sensitive information
on the screen along with personal details, then it is highly possible that such banking
information might be accesible to unethical hacking (Vinoth and et.al., 2022).
CONCLUSION
The above report has accurately observed and discussed the crucial role of Information
Technology as an essential factor both in the development and the downfall of a business
organization. The report has precisely observed various applicable aspects of the IT sector in the
chosen organizational context of the HSBC bank holdings company. Major factors related to
how the company's productivity gets enhanced along with how it is faced by significant
challenges through IT have also been illustrated. The report has presented certain aspects of IT

sector that have been implemented within the business proficiently, effectively and efficiently by
the HSBC organization's employed resources.
The HSBC Holdings plc is a service sector company that uses multiple types of computer
networks in its daily transactional activities. These have also been identified and discussed.
Moreover, the impact that IT variations like increasing use of artificial intelligence has in
enhancing the businesses in current times in conjunction with the its relative effect on the chosen
service firm have been examined with detail in the report. In conclusion, the overall impact of
the implementation of IT has been evaluated.

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