Impact of Information Technology in Banking Sector: A Case Study of ABC International Bank

This report discusses the impact of IT in enabling businesses in enhancing their operations, based on a case study of ABC international bank. It covers social and ethical issues, computer networks, and the implementation of artificial intelligence to improve customer experience.

Introduction to information
technology

ABSTRACT
The report covers the impact of IT in enabling businesses in enhancing their operations.
This will be based on banking sector; the chosen organization is ABC international bank. Any
innovation and transformation in the business comes with certain social and ethical issues which
are to be considered to run the business efficiently specially in the banking business like
moralized utilization of data and resources, misuse of the personal information and to be
responsible in the adoption of disruptive teach. Different types of computer networks are
discussed. Also the enhancement of these banking businesses will require the implementation of
artificial intelligence to improve the customer experience.

Table of Contents
INTRODUCTION...........................................................................................................................4
LITERATURE REVIEW................................................................................................................4
Impact of IT.................................................................................................................................4
Social and Ethical Issues.............................................................................................................5
Computer Networks.....................................................................................................................6
Artificial Intelligence...................................................................................................................7
ANALYSIS AND DISCUSSION...................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
The term information technology is referred as the act of studying or using systems like
computers for information storage, retrieval and sharing or transferring. The use of information
technology in the banking sector enables banks to provide best of its services to its users. It helps
the banks to provide a secure, affordable and reliable experience to its consumers. banks can
sustain their competitive advantage in the industry through IT services. Arab Banking
Corporation (ABC) is an international bank in UK. The current report will discuss the impact of
IT in helping ABC international bank to enhance its operations. Report will highlight the ethical
and social issues that have been becoming highly important in the virtual world. Further the
report will identify and discuss some of the issues that hinders the smooth functioning of the
business. The report will also identify and discuss the different types of computer networks and
their relative impact on the business. Lastly the impact of artificial intelligence in enhancing the
business of ABC international bank will also be covered.
LITERATURE REVIEW
Impact of IT
According to Kumar and Prakash (2018) the environment of banking sector is becoming
increasingly competitive in the recent time. In order to effectively survive and flourish in the
evolving conditions of the banking industry the banks implement the use of latest technologies
that helps in their development and making their structure flexible so that it can respond with
ease to the changing conditions of the industry. IT acts as an instrument for the banking sector
for reducing its cost and communicating effectively with people and the institutions involved
with the banking business.
In the thoughts of Achmad and Pamungkas (2018) with the use of IT the banking system
is moving from being traditional towards being relationship banking. Initially the relationship
that used to exist between bank and its customers was one on one through branch level. All the
responsibilities of clearing operations and decision making lied with the branch individual. And
the head office was burden with the overall network of clearing, and management of branch
network size and staff training. Now in modern banking the need to rely on branch reduced.
In the views of Abbasov, Mamedov and Aliev (2019) using IT in the banking sector is
important as it helps the banking institutions to increase their efficiency. Banks are enabled to
provide efficient and fact services to their customers with utilization of modern technologies.

Further it is said that IT is used by banking sector firms to handle the information. There is huge
amount of confidential data of users with the banks which is essential to be kept protected and
secured. With the IT systems the industry creates updated system for monitoring information
system and making its internal control system highly strengthened. This helps in getting done the
housekeeping and other essential functions like the function of reporting. Also the information
sorting becomes easier.
In the thoughts of Kumar and Ghosh, (2022) the main or the major benefit for which the
use of IT in banking sector is becoming extremely beneficial is the cost reduction. A lot of cost is
saved by the companies operating in banking sector for instance the cost reduces as less spaced
office is required when the company uses modern technology. Further the use of IT in banking
sector enables the banking institutions to ensure accuracy of the functions that they perform.
Accuracy is required in all the functions such as cheques clearance, making entries in the pass
books, inter –branch & inter –bank reconciliation and many other related functions quickly and
correctly with using modern technology.
In the views of Kustina and et.al. (2019) banking and insurance industry use IT to
enhance the experience of their customers by making improvements to their customer service.
The customer finds it easier to do all the banking functions with internet facilities being use by
their banks. When banks utilize internet facilities there is no need for the customers to go to the
banks for getting their smallest of works done. Such customers can to all their banking
transactions with ease at their homes. Networking refers to sharing information, conveying of
messages and ability to have face to face interactions even being apart from the person
interaction is happening with.
Nizam and et.al. (2019) added to the advantage that is explained above by making
emphasis on ease in communication. With the help of internet thousands of computers can be
connected together all the time at all days in a year. The culture of long working hours
eliminated with the use of internet. In the western countries the banks are fully computerised.
Social and Ethical Issues
There are various social and ethical issues that needs to be considered to run the business
efficiently which are discussed as follows:
According to Sardana and Singhania (2018), moralized utilization of data and resources
will allow the efficient operation and running of the business. Businesses needs to utilize the data

and resources available at its disposal morally and ethically. Such utilization shall be such that it
does not invade the privacy and most importantly, measure and compliances shall be employed
ensuring that there is no leakage and inappropriate usage of these valuable data and resources.
Also, Del Gaudio and et.al., (2021) opined that the most crucial issue in the technology is
avoidance of the personal information being misused. This personal information is collected by
the websites without the users being aware of it through browsing of the internet websites,
making purchases online, providing our personal information on the websites, engagement with
various businesses online and participating on social media. This gathering of the personal
information by the companies is done to customize and personalize the browsing experience of
the customers. Thus, this personal information needs to be protected from being misused to avoid
any legal obligation to run the business efficiently.
Hassani, Huang and Silva (2018) is of the view that the innovative, ground-breaking or
disruptive tech is not only a medium to overcome the competition but also the only way to break
even. Therefore, before adoption of this disruptive tech, the implementers shall conduct a due
diligence for ensuring the appropriate placing of the protections that needs to commensurate with
the teach that is to be adopted and implemented. This will efficiently lead to practicing of the
ethical tech.
Computer Networks
According to Sahay, Meng and Jensen (2019) there are various types of computer system
networks. PAN is the first type of such network system. It is an abbreviation that is used for the
term personal area network. This is the most basic type of network and also the smallest one.
This type of network is suitable for only one person. Such network is covers very limited space
that is generally an individual room or a building. It is used by an individual as it connects only
few number of devises. The most common example to this Bluetooth. Next type of network is
local area network, shorthand given to this LAN. This type of network covers larger area as
compared to the previously mentioned one. All the devices and systems in a local area can be
connected together with this type of networking system. All the devises that operates or
functions in a building or even more than one building are all can be connected with this type of
network.
Further according to Simpson and et.al. (2018) another type of networking systems is
WLAN. the term stands for wireless local area network. this type of networking area is basically

a local area network that does not include any kind of wired connections. the most common
example is the usage of Wi-Fi, rest all the situations that are applicable to local area network as
same in this. next is MAN or metropolitan area network. in this particular type both the LAN and
WAN types of networks are included. Then the other type of network is the wide area network
(WAN), this type of network is used by banking industry. The functions that are performed by a
WAN network are just as same as the LAN but over a large network. devices in this can be
connected remotely. the most common and basic example to this is internet.
Furthermore, according to Wang and et.al. (2018) the sixth type of network is known as
SAN or storage area network. this is again a type of LAN network but it is designed with the
purpose of handling large amount of data that is to be transmitted and stored. the purpose for
which this type of network is used is moving large, complex resources of storing data, all these
are done in a separate atmosphere that is used for high performance handling. with this type of
network, the retrieval of data and its storage can be done with ease. the freeing up of space and
improving the original network's performance entirely becomes possible. the seventh and the last
type of computer system networking is VPN that is an abbreviation used with reference to virtual
private network. VPN is used based on its utility to increase and keeping data secure and private
when a network is assessed. it works like a middleman between the user and the network that
does the task of encrypting the data and keeping the identity private. when sensitive information
is to be send or received this type of network is of great utility.
Artificial Intelligence
In the opinion of Ashta and Herrmann (2021) artificial intelligence is used greatly in
banking sector for a varied number of reasons. to begin with artificial intelligence is used for
customer service that is engaging with the customer. with the use of AI in banking and insurance
industry companies provides a 24 * 7 service to their customers. the return on investment is high
with the use of chatbots in the service providence to the customers. Chatbots are used with the
aim to effectively handle the tasks that are commonly done by the customers of such sector.
some example of commonly performed tasks by the customers are inquiry of balance, reading of
mini statements, transferring of funds, etc. further the next utility of using
In the views of Soni (2019) AI in the business is robo advice it is one of the most
discussed topics. a robo adviser is used for understanding the financial health of a customer on
the basis analyzing the data that is given by the customer to the system and the financial history

of the user is also analyzed. this analysis done provides result to the customers in the form of
important advice. further the other importance of AI is its usage for general purpose or the
predictive analytics.
ANALYSIS AND DISCUSSION
The ABC international bank make use of IT for enhancing its operations. As the banking
environment has become highly dynamic use of IT enables ABC international bank to survive
and grow in the industry. The bank uses latest technologies as a resource to develop their
learning and making the structure of bank flexible, with which the faster evolving nature of the
industry can be cope up with. There are various categories of areas where the bank uses IT to
enhance the functions (Tongurai and Vithessonthi, 2018). To being with E –banking is the first
function of banking that is based on IT. This became popular long back with introduction and
increasing use of credit cards & E –funds transfer. This originated the concept known as web –
based banking. Like many other banks ABC international bank also made its services
modernized by making use of electronic and computer equipment.
Revolution of electronics helped the bank in making its business operations easier and
flexible for the benefits of consumers. the ABC bank relief from maintaining huge registers and
banks accounts large papers. Being an E- bank the bank offers various facilities like debit and
credit cards, electronic cheques, De Mat accounts, ATM, electronic fund transfers, mobile,
telephone & internet banking and electronic data interchange. The benefits of E –banking to the
consumer are ease of performing banking work anywhere and wherever in the world (Meena and
Parimalarani, 2020). Requesting for bank services, enquiring of balances, giving instructions to
bank are some of the most frequently performed tasks by the customers of the bank. In addition
to this benefit another benefit to customers is that they can perform tasks anytime.
The most important advantage is of psychological benefit that comes to customer by the
convenience they get from e- banking. Also the cost of banking reduces to great extent,
withdrawal of cash from any branch or ATM is another such benefit. Further the last advantage
to customer that can be noted is ability to do online purchase of goods and services. E- banking
in addition to help bank in providing all these benefits to their customers also provides some
benefits to the bank. These are ABC bank is now able to innovate, bring new schemes with using
technology in order to face the competition that exists in the industry.

As mentioned the customers are no longer required to visit bank physically again and
again this reduction in number of customers visiting the bank reduces human intervention in the
banking processes hence the transparency is more (Sharma and Choubey, 2022). Reconciliation
of inter –branch is immediate, so it results in lower potential of fraud. Promotional schemes of
the bank are effectively performed through e- banking. With E- banking the data of users gets
integrated helping banks to provide customised & individualised services.
Further the impact of IT on ABC international bank is over the service quality. IT is
effectively used by the bank to ensure efficiency in the service delivery. Some financial services
are commoditised by technology. Bank needs to work continuously for fostering of their
customer relationships and retaining the loyalty among customers. The banking services are
increasingly becoming depersonalised with the use of technology. The cost of delivering services
reduces.
Thus, the above discussed issue of misuse of personal information needs to be taken very
seriously in every organisation. This information is used by the businesses to expand their reach
to their customer base. For example, the businesses need to know what their customers or target
customers are searching and what their customers or target customers are consuming and
utilizing the most. Also, for political businesses, they need to know what are the social or legal
issues which are attracting the most customers or target customers towards itself. But this usage
of personal information becomes misuse and is not ethical when the businesses exploit the
opportunity to earn money and achieve their goals.
The ABC International Bank also has its responsibilities towards its customers in relation
to the privacy and security of its data. It is formally committed to secure its customer’s data and
to protect its privacy which is officially supported by the Data Privacy and Data Security
programmes in which the board approved the Code of Conduct (ABC International Bank PLC,
2022.). Also, the bank follows the standards which are recognised internationally like ISO
27001, NIST CSF, COBIT, etc. In its established standards, the ABC International Bank ensures
its compliances with the respective privacy laws like EU GDPR, UAE DIFC DPL, Bahrain
PDPL, Singapore PDPA, Brazil LGPD, etc.
The Bank has also employed various measures and techniques to comply with its data privacy
and data security requirements and compliances. One of these measures includes certification
i.e., PCI-DSS and SWIFT CSP certification which needs to obtained whenever there is any

requirement or any applicability. The posture of its cybersecurity is to be assessed on the basis of
the maturity assessment which will be done on the basis of CMMITM. The bank also publishes
privacy notices regarding transparency and lawfulness in which the customers are being
informed of their individual rights and the purpose for which the personal data of these
customers is being processed by the Bank.
Also, for spreading the awareness, the Bank is publishing advice of online security to
benefit the interest of the customers. Such an awareness will include the communication of the
issues like security in banking, identification of theft, phishing & social engineering and security
of password through good practices. For detection of threats, Bank ABC utilizes its state of the
art and one of its type solutions for monitoring its security events so that these threats can be
detected as well as prevented. And lastly, the governance of the Bank needs to be considered and
for this, Bank ABC adopts a governance model of three lines of defence for ensuring proper
assurance and compliance of its internal policies.
The type of computer network that is used by ABC international bank to transmit data to
branches and receive data from branches and to discharge the routine functions is WAN.
Monitoring is done by the bank for effectively managing WAN. There are three approaches to
manage WAN available to the bank. These are management via the carrier, core providers and
managed service provider. There are various impacts of WAN over the operations of bank. The
area coverage of this type of computer network is very wide, it covers around thousand plus
kilometres. The various locations of the banks get connected without any effort. For this the bank
use internet service providers that provide leased lines (Al-Hamiri, Abd and Al Abboodi, 2021).
Further all the data that is stored over all the computers that are connected with in the network
can be shared. The server of head office at ABC bank is use of share data with all the other
branches of the bank. Cost is saved as separate e- mails, back up serves are not needed to be
purchased.
Also updated files can be accessed by the users from the data stored on the servers.
Employees of the bank work on files that are updated. Files that the servers are worked upon to
update the files so that all the connected systems can receive and access them. All these task of
update are done in fraction of seconds. Internet of things facilitates the facilitates further
exchange of data and messages (Sugianto and et.al., 2020). Using leased lines help in increasing
the bandwidths which results in increasing the productivity of the bank. Guaranteed uptime is

given by WAN providers. Uptime means the time during which a particular machine especially
computer is in use.
Artificial Intelligence can be very well used in the banking sector. This will improve the
customer services and the customer experiences while interacting and transacting with and
through the bank. An example of this artificial intelligence in the operations of the Bank ABC is
use of virtual assistant (Malali and Gopalakrishnan, 2020). In this voice biometrics are used for
authentication of the identity of the client and thereafter, the virtual assistant will evaluate the
details of accounts of the customers and also analyses the behavioural and demographic data to
be one step ahead in providing the most accurate and concise solutions possible.
This authentication of the identity of client and analysis of the behavioural and
demographic data leads to saving of time of the customers which is done in a matter of seconds
which in turn, results in customer satisfaction and customer loyalty towards the Bank. The virtual
assistant also recognizes the probable cause which may result into an enquiry. These actions of
the virtual assistant can be explained with an example (Chang and Shih, 2018). Let’s suppose,
the virtual assistant registers various foreign transactions in an account of a customer which
associates them with the possibility of an international journey. Resultantly, it suggested a
service free withdrawal of cash globally thus saving the customer a significant cost on these
withdrawals.
Incorporating artificial intelligence in the services of the Bank ABC will also result in
attainment of various benefits like lowering of the financial risks, betterment of the customer
experience, higher rates of conversion, enhanced accuracy in the predictions by the Bank, faster
and efficient making of the decisions and enhancement of the productivity.
CONCLUSION
On the basis of the above report the concept of information technology has been made
clear. The report has highlighted the use of IT systems in the banking sector. It has been known
from the report that it is highly important to meet the requirements arising from the industry’s
evolving nature. The report has discovered the importance of ethical and social issues of the
information technology that are becoming important for the virtual world. Business issue that
does not allow efficient running of the baking businesses have been outlined. Various types of
computer networks have been identified and their impacts have also been discussed in the above

report. Lastly the report covered the effect of artificial intelligence (AI) in making the business
enhancements.

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Online
ABC International Bank PLC. 2022. [Online]. Available through:
<https://www.bloomberg.com/profile/company/1617834Z:LN>
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