IT's Impact on Business: HC1041 Report, Holmes Institute, T1 2019

This report examines the impact of information technology (IT) on businesses, specifically within the banking sector. It explores how the adoption of IT, particularly ATM technology, influences business performance, cost efficiency, and security. The report highlights the advantages of IT, such as improved customer service and reduced operational costs, while also addressing the risks, including cybersecurity threats and business risks associated with technology adoption. Mitigation techniques, such as real-time monitoring and logging systems, are recommended to manage these risks and maintain business authenticity. The analysis concludes that while IT significantly enhances banking services, careful management and continuous improvement of security measures are crucial for sustainable growth and risk mitigation in the industry. The Holmes Institute HC1041 report provides a comprehensive overview of the interplay between IT and business strategy.

IMPACT OF IT ON BUSINESS

IMPACT OF BUSINESS ON IT 1
EXECUTIVE SUMMARY
The main focus of this project is to find the impact of technology and the risk it imposes to
businesses in the banking sector. The adoption of I.T. besides being a massive trend in the
way that business is carried out, the technologies adopted have an impact and impose
several risks. This paper aims to find the threat imposed by the technology and what
operations need to be carried out to prevent the emergence and disruptions of the business
operations through the use of the techniques.
Mitigation techniques to prevent the spread of the risks should be put in place to ensure the
smooth operation of the business. Factors to consider before the adoption of technology
should be aided by the type of business that needs to be carried out. This can significantly
improve and provide a better mechanism to avoid security and integrity risks that emerge
from the adoption of techniques without considering the impact of use.

IMPACT OF BUSINESS ON IT 2
Table of Contents
INTRODUCTION.....................................................................................................................................3
RESOURCES..........................................................................................................................................3
IMPACT OF AUTOMATED TELLER MACHINE ON BANK PERFORMANCE...........................4
REQUIREMENTS...................................................................................................................................6
ADVANTAGES OF USING INFORMATION TECHNOLOGY.........................................................6
RISKS OF IT ON BUSINESS...............................................................................................................6
RECOMMENDATION.............................................................................................................................7
CONCLUSION.........................................................................................................................................7
REFERENCES........................................................................................................................................8

IMPACT OF BUSINESS ON IT 3
INTRODUCTION
The banking industry is highly adopting the use of information communication and technology
(ICT) due to the enormous increase in the trends in the sector and the nature of the industry.
Empirical evidence in the relation between the impact of ICT in the banking sector has
provided a positive effect on the growth of the business and the improvement in the
performance of the banking sector.
The adoption of ATM and its use by the banks is gaining popularity, which has the cost
efficiency of the banks. ATMs can be quickly adopted and deployed to various workstations
where they can be deployed and used by the customers. The impact of the use of the ATMs
has led to the improvement in the cost-efficiency that provides better returns on the
investment of using ICT in the banking sector.
Though technology has stimulated the growth of the bank networks, all the services depend
on the use of I.T. such as deposits, cash, withdrawal. The reason why the sector of banking
and finance is the leading consumer of Information Technology is because of the complexity
and the services in that industry.
The project highlights the main areas that information technology is highly used in the banking
and finance sector, and the impact of the use of I.T. The main area of focus is the use of ATM,
and it impacts.
RESOURCES
The sector needs security mechanisms that provide a high level of security and confidentiality
since they are always the main target of theft and attacks. One of the best tools of choice for
monitoring is the use and the adoption of a fogging security system. The system can monitor
and track of the activities and the transactions in real time and alert in case of fraudulent
events.
The use of a camera is not enough to prevent malicious activities such as theft from the bank,
and they need to heavily invest in smart security systems that can monitor and detect
fraudulent and activity
.
The banking system with all the complexities has extensive involvement and impact in the
daily lives of its users, activities such as shopping with the use of a credit card, paying bills,
online transactions. These activities need to be secured and tracked at every level.
Techniques such as the use ATM in the finance sector provides more excellent performance
in every financial institution, and it is estimated that the use of the ATM saves at least 420
million in the total amount of transactions that are made within a year (Olotu, Maclayton and
Opara, 2010).

IMPACT OF BUSINESS ON IT 4
IMPACT OF AUTOMATED TELLER MACHINE ON BANK PERFORMANCE
Technology and I.T. have dramatically improved convenience in operation and daily activities.
The emergence of such technology meant to ease the services in the banking and finance
sector is the use of the ATM (Aduda and King, 2012). The introduction of ATM has provided
convenience in the operations and the challenges facing the such as theft. According to
Kamel (2005) in his paper, the technology was introduced in an attempt to fight competition,
which led to the increased growth in its use.
However, the advantages introduced, have been lowered by the fraudulent activities, that
significantly affect the operations and the use of the technology. Kamel estimates that, fraud
activities have overwhelmed the growth and the improvements brought by the technology.
Table 1: Performance and the number of time consumers spend while accessing money
services using the ATM.

IMPACT OF BUSINESS ON IT 5
The business of banking slowly needs the use and the implementation of I.T. The sector
involves a lot of transactions that require real-time monitoring and tracking to prevent
fraudulent activities from taking place. Involvement of I.T. in the business is a more significant
improvement, and the advancement in the operations of the company. Some of the significant
impacts in the industry, such as security measures, confidentiality, and integrity, have been
highly improved by the techniques employed by the use of I.T (Arif and Nauman Anees, 2012)
The use of I.T. in the business is paramount and is highly recommended. Daily activities such
as online transactions and credit card heavily rely on the use of I.T. Therefore, the primary
operations in the sector need a substantial investment in I.T.
Most of the vendors have come up with new specialized and improved ATM. Some of the
systems have biometrics, which is used for authentication to access the payment gateway.
Some improved to the extent of usage into the rural areas where the consumers can
communicate with the machines at their local languages to access banking services such as
withdrawals. This potential has widened the spread and scope of the usage of technology in
the sector.
Today, personalized services in the banking sector have been made better by the deployment
of the ATM by the banks.
Table 2: Statistics on the effects of ATM on the banking sector.
IMPORTANCE OF IT IN BUSINESS SURVIVAL
Information Technology has been used in various ways by the banking sector. Some of the
methods include communication and connection. The increased use of technology has aided
production development and the implementation of better techniques and approaches to cub
and improve the level of security. As stated by Kamel, real benefits such messaging, access
to the payment gateway, communication can only be realized by sufficiency connectivity and
adoption of I.T. Some of the technology products used in the banking sector include:
• Online payment
• Credit card.
• Shopping
• internet banking
• mobile banking
Reasons why technology is used in the banks include:
• Purchase of products at a point of sale with a card without the need for cash.
• Online money transfers through internet banking.
• Money withdrawal from the bank using an ATM.
• Credit transfer to a mutual account.

IMPACT OF BUSINESS ON IT 6
REQUIREMENTS
The operation of an ATM requires both software and hardware requirement. Installation is the
first procedure that is involved, and the machine should be installed at a secure place, highly
secured, and free from risk. The network is a significant component that needs provision to
aid interactions between consumer transactions and the banking systems. Software
requirements involve the use of an interface where consumer's information can be captured
and sent to the payment gateway.
Every transaction and communication between the machine and the computer system is
highly secured and maintained to prevent fraud (Bessis, 2015). The network is not limited to a
specific protocol for use with the device as long as the needs of the network performance are
satisfied.
The choice of business uses I.T., both internally and externally. Externally the company is
used by the customers to access their payments gateway through the bank's network.
Customers can access through an interface or using a card. Internally, customers can access
the services through computer systems that are installed internally inside the bank.
ADVANTAGES OF USING INFORMATION TECHNOLOGY
The benefits and the advantages of the use of I.T. range from the customer to the bank. The
advantages of the use of technology to the customer include:
• The convenience of services – remote banking enables the customer to enjoy
convenient bank operations at any point.
• Reduction in waiting time – since all the information in the sector is centralized, it is
readily available to the customers at any time, which reduces delay in information
delivery.
• Information inquiry such as balances and transaction can be made at any time at a
customer’s preference and convenience.
Benefits of the use of I.T. to the bank include the following:
• reduced cost due to the improved efficiency in transaction automation.
• Increased replied to customers
• Accurate computing and avoidance of error-prone transactions,
RISKS OF IT ON BUSINESS
The use of I.T. imposes several types of risks, which range from security to integrity. Some of
the threat imposed by the adoption of the technology include:
• Business risk – if a business fails to adopt the growing techniques, they may face
competition from the other competitors in the same business. This may lead to loses,
which may cause the business to fail.
• Cybersecurity risk – this is the most significant risk in the operation of a business, it
ensures that information is secure and safe from access by unauthorized personnel.

IMPACT OF BUSINESS ON IT 7
RECOMMENDATION
The choice of business can monitor the use of I.T. through the use of real-time monitoring and
logging system that records every transaction (Bessis, 2015). Once a trade appears to be
fraudulent, the deal is blocked and raise an alert. The authenticity of the business can be
maintained through the use of a specialized system to analyze the transactions in real time
(Dameri, 2011).
CONCLUSION
Advancement in the use of technology has brought about significant impacts on the growth of
the banking sector. However, the risks involved in the adoption of the techniques are also
paramount to the growth of the industry. I.T. plays a significant role in the improvement of
services, monitoring, and management of the payments gateway.
However, due to the adoption of the use of I.T., the banking industry is prone to attacks and
fraudulent activities. Although the events can be curbed through the use of real-time
monitoring and tracking of every transaction, it is upon the banking sector to invent new
method and adopt improved and better management and logging tools that can bring about
change.

IMPACT OF BUSINESS ON IT 8
REFERENCES
Aduda, J. and King, N., 2012. The relationship between electronic banking and financial
performance among commercial banks in Kenya. Journal of Finance and Investment
Analysis, 1(3), pp.99-118
Arif, A. and Nauman Anees, A., 2012. Liquidity risk and performance of the banking
system.Journal of Financial Regulation and Compliance,20(2), pp.182-195.
Bessis, J., 2015.Risk management in banking. John Wiley & Sons.
Dameri, R.P., 2011, September. Evaluating the Role and Potential of Internet Banking: The
Credits Experience. The European Conference on Information Systems Management (p.
109). Academic Conferences International Limited
Kamel, S., 2005. The use of information technology to transform the banking sector in
developing nations.
Olotu, A.O., Maclayton, D.W., and Opara, B.C., 2010. An empirical study of relationship
marketing orientation and bank performance. Research Journal of international studies, 16(9),
pp.47-57.