Analysis of Information Technology Impact on Business Operations

This report provides a comprehensive analysis of the impact of Information Technology (IT) on business operations, focusing on the case of HSBC Bank. It explores how IT enhances operational efficiency, improves decision-making through data analytics and cloud computing, and fosters stronger customer relationships. The report delves into the ethical and social issues arising from IT, including data privacy and security, and examines the role of Artificial Intelligence (AI) in improving communication, reducing costs, and enhancing customer satisfaction. Furthermore, it identifies the benefits and drawbacks of IT investments, discusses the impact of computer networks, and assesses risk management strategies in the banking sector. The literature review provides supporting evidence from various researchers and the report concludes by highlighting the importance of IT in modern business environments.

INTRODUCTION
TO
INFORMATION
TECHNOLOGY

ABSTRACT :
Information technology in the advance world which is becoming as the major part for the
human. The information technology is having the various factors in the company which is
effective & efficient that includes the big data analytic and cloud computing. By this, it leads to
reach more buyers & novel goods can be launched. With the help of IT, the management can
able to take the better decisions & also offers the satisfactory results to its buyers which also
leads to create the strong relationship. Furthermore, companies facing ethical and social issues
also pertaining to the basic information technology that includes the privacy, protection.
Artificial intelligence is having the great role in the company as the task is being taken with the
improved communication.

Table of Contents
ABSTRACT : .............................................................................................................................2
INTRODUCTION...........................................................................................................................4
Literature Review -..........................................................................................................................4
Analysis and discussions ................................................................................................................5
Impact of IT to enhance the operation -......................................................................................5
Ethical & social issues are increasingly becoming significant in the digital world. Identify &
analyse the importance of them to run venture.Literature Review -...........................................7
Ethical Issues - ...........................................................................................................................7
Social issues - ..........................................................................................................................11
Identifying and discussing the impact of computer networks on business -.............................11
Impact of Artificial Intelligence (AI) in enhancing their businesses.......................................13
Analysing different benefits and drawbacks of investing in Information Technology.............15
CONCLUSION .............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Information technology is the application of computers and telecommunications
equipment to store, retrieve, transmit and manipulate data, often in the context of a business or
other enterprise. Information technology is the bedrock of modern enterprise organizations. The
terms refers to computer systems, software, internet, and other infrastructure that enables an
organization's core capabilities. This also helps in protecting the data and also looking after the
database. It is the information technology that involves the use of networking & other storage
tools in order to exchange all types of electric data(Laraia, 2018). The technology refers to the
skills, process and methods which is being used for the particular production of goods and
services. Information technology plays a major role in bank sector. Here now we are going to
have a look on HSBC bank in terms of IT . HSBC is one of the world's largest banking and
financial services organisation. Its headquartered is situated in London. In March 1865, HSBC
opened its doors for business in Hong Kong. HSBC was born from one simple idea- a local bank
serving international needs. The company provides a variety of international banking and
financial services, including retail and corporate banking, trade, securities, custody, capital
markets, banking and insurance . HSBC holdings operates worldwide. It operates around the
Indo - pacific region of the globe and his acclaimed laurels, growing to become one of the most
trustworthy foreign banks in many countries. This report will evaluate the importance of
information technology in banking sector ,and their impact on business to enhance the operation
of company . This report will also identify the computer networks .
Literature Review -
According to Sharma and Bhagwat (2003) Rajaraman, 2018) evaluated information
systems performance according to operational efficiency of the information system, downtime
and the responsiveness of the system.
Accordingly, Levy et al. (2011) (Kuvandikovich, , 2020)in their study showed that the
alignment between International Journal of Academic Research in Business and Social Sciences
2016, Vol. 6, No. 12 ISSN: 2222-6990 680 information system and strategy, the user-
friendliness and the functionality of the system play an important role in the SME’s performance.
However, the investment in information is limited to supporting operations and transactions.

In accordance with A.T. Mohammed, (2012)1,(Reuter, 2019) in his research article entitled on
E-Service quality strategy: Achieving customer Satisfaction in online’, has emphasised that
online banking requires formulating a strategy of building of framework for web based e-service
quality model in internet banking services. Online banking for the customer satisfaction which
can lead to build and measure an innovative e-services 9 model that is applicable to evaluate the
web based internet banking services quality.
Analysis and discussions
Impact of IT to enhance the operation -
This focus on technology has seen a secular trend over the recent past as businesses have
worked towards building and enhancing resilience . The banking system is slowly shifting from
the traditional banking towards relationship banking. The current environment has thrown up
challenges like never before. The biggest impact as chosen by surveyed , has been on faster and
more secure payments.
 Better use of data - In addition to cloud, HSBC now has a “ very clear data agenda ”.
According to Bottomley, that the bank is focused on using data to support the customer
experience, as well as improve the risk management areas. However, the key theme is
using data to make the HSBC customer relationship more personal and relevant. This
create a huge impact on business . Previously, the data requirement would have sat
application by application .
 Building Resilience – This is not a single aspect, it is about more than a strong balance
sheet. To enhance the operation of business this will interestingly create impact on
valuing customers, maintaining a strong balance sheet and supporting a culture of
innovation were the key attributes to building resilience . In light of the current
environment , maintaining sufficient cash flows and gaining access to advanced
technology were identified as key barriers of building resilience. But with the help of
technology this can be minimize.
 Challenger banks and future challenges – A lot of the traditional banks have been
forced into thinking about technology as a result of a group of new, digital – first

challenger banks entering the market such as Revolut and Metro Bank. According to
Bottomley's thoughts on the impact these new entrants are having on the investment
decisions at HSBC . Interestingly, HSBC does take inspiration from these banks. In terms
of broader challenges for HSBC and digital, they include getting access to data safely and
ensuring that the bank remains operational whilst new technology investments are
ongoing.
 Risk Management – There is better risk management of banking frauds through the use
of passwords and two way authentication during the online transactions this can be easily
done with the help of information technology. Information technology has two sides
which impact the banking sector differently . The risks are high in both the ways but with
IT security, the scopes of minimizes the threats are more than without it. In the current
scenario, information technology has become the backbone of the banking sector.
 Influencing economy of scale – Competitive pressure force banks to lower their cost .
Technology has a major impact on the way banking and financial services are delivered.
HSBC bank seeks to secure the optimal business structure, and secure the competitive
imperative of economy of scale. There are other options to get economy of scale,
including joint venture and confederation of financial terms .
 Influencing economy of delivery – Information technology has a major impact on the
way banking and financial services are delivered, a wide range of alternate delivery
mechanism becomes available, internet, ATM, these reduce the dependence on the
branch network as a core delivery mechanism. HSBC bank systems are substantially
over-supplied with a delivery system through a duplication of a network , the bank has to
change their delivery strategy.

Ethical & social issues are increasingly becoming significant in the digital world. Identify &
analyse the importance of them to run venture.Literature Review -
The information can be fetch, store and transfer to its end users with the help of
information technology to make them understand about the related task in the organisation.
Information technology application leads to have a major shift in the society. There are certain
ethical and social issues which are given below:
Ethical Issues -
 Personal information - This is one of the primary ethical dilemmas in our technology
empowered age revolves around how businesses use personal information. Personal
information is the new gold, as the saying goes. (.Lloyd, 2020)Security of data is the
major issues and this is becoming the major issues for disclosing of the data and the
information for the privacy of any individual as the data and the information is being
transferred in huge quantity through different.
 Reduced operational cost – By implementing artificial intelligence into a business
business owners can save a lot of operational costs as AI automatically does a lot of work
of staff or employees. AI software are very expensive but in long term artificial
intelligence helps a business to save a lot of money as it can do more work in less time.
For smaller companies, artificial intelligence is difficult to implement because of its
expensive cost and maintenance cost. HSBC bank is using artificial artificial intelligence
which helps them to reduce their cost of employees and researchers.
 Faster and efficient working – Artificial intelligence has the ability to to perform
algorithms continuously and faster to analyse a big data and predict outcomes. It also
helps in doing repetitive tasks such as sending emails, messaging employees about
various information etc. Human resource work is becoming more faster and efficient such
as contacting and messaging applicants, scheduling interviews, providing information
etc. because of artificial intelligence. Data is processed more faster and accurately for
further use in HSBC bank which brings a great efficiency to the organisation due to

artificial intelligence. It helps in processing data and approaches new customers
automatically through different sources such as emails, calls, messages etc.
 Consumer satisfaction – The most crucial and important aspect of the business is to
provide satisfaction to customers which is also the difficult part. Customer trust is the
main key for promoting and growth of a organisation. HSBC bank is providing efficient
and faster communication for fulfilling customer's demand through artificial intelligence.
This helps the bank to create brand loyalty among the customers which helps in growth
of the organisation. It directly reduces the human help needed to solve the queries even
complex ones. Also AI reduced the time for researching problems then fix it.
 Information security – Malware targets the mistakes done by humans to hack the data
of a company. Artificial intelligence is the best option as it makes the computers and
networks safer by removing malware and spams. Artificial intelligence is used by the
HSBC bank to protect data from hackers as their data is an important part of the
organisation. AI also enhances the financial security which is very important for banks to
set up. A smooth and secured process is needed for the money transactions which is
created by artificial intelligence.
 Improves risk management – One of the most important factor which is risk can be
reduced by innovating artificial intelligence in the business. It is an important factor for
the banking industry as it can reduce the chances of frauds and defaults from their
customers. HSBC bank is using artificial intelligence to overcome this factor as it
analyses data in massive volumes and recognise patterns of several customers an this
process helps bank to find out any credit risk, defaults and frauds. Also AI helps a
business to identify thefts and money laundering .

Social issues -
 Breakdown of Communication - It analysed that communication breakdown is a social
issue because everyone is engrossed in their laptop, smartphones, tablet, even communal
things like watching television are compromised. By allowing technology to improve
your life and not to become a distraction , but with the help of digital well being
technology is improving the life of clients. In context of HSBC bank , miscommunication
can create a conflict between employees and consumers of bank .
 Identity Theft – Fraud is another spurious activity that has been able to evolve in the
wake of easily accessible computers and internet. Fraud is a social issue because
computers can be easily hacked by someone perhaps the personal data and information
can be used by other parties. In order to protect the information of the consumers the
HSBC bank introduced a security & privacy policy for their clients.
 Online Banking – HSBC bank is providing a online banking facility to their clients for
the betterment of doing transactions with the help of their mobile phones or computers.
Online banking is also a threat for the company , as online payments is using everywhere
which can create a fear of frauds .
Identifying and discussing the impact of computer networks on business -
With multinational corporations like HSBC expanding their operations across
geographical boundaries, sending and receiving information rapidly has become of crucial
importance. A single event half way around the world can have ripple effects in all the financial
markets.
One factor for this fast growth in HSBC to become a truly global banking giant can be
attributed to the rise in the computational power accessible to organization given by the constant
development in informational and technology sector. Especially the rise in the network
infrastructure. Computer networks can be classified by various different factors such as the
capacity of the network, authorization to people to who the network in accessible to, the network

structure, technology, and the purpose of the organization to use that network. However, the
most common method to classify a network is to identify the physical or geographical extent.
The most common computer network used by HSBC are given below.
 Local Area Network (LAN)- LAN is the most common and popular network design
used by most businesses including HSBC. LAN interconnects computer devices in a
limited geographical area. The most defining attribute of LAN is its ability to connect
devices located within a single or limited area such as HSBC's office building. The scale
or the number of devices connected in LAN is not an issue for the network. It can have
thousands of connected devices being a useful computer network structure for thArtificial
intelligence also enhance the better business operations so that they can perform the
various task in an appropriate manner.e banking MNC.
A simple office LAN allows all the connected devices on the network to access a shared
internet connection. HSBC's LAN might even be more robust to include firewalls, load
balancers, network intrusion detection, redundant links, and traffic segregation among other
features. As well as, the ability to share files with other devices on the network, used shared
printers. But most importantly, the connected devices can be accessed, managed, and controlled
from one location. All proving to be a vital necessity for HSBC to protect its sensitive data.
 Wide Area Network (WAN)- A WAN connects group of computers over large
distances. Unlike LAN, WAN is not tied to a single geographic location. HSBC can
utilise WANs to connect their multiple office locations across the globe. Each HSBC
office might have its own LAN, which in turn might be connected via a WAN.(
Benckendorff, and et, al., 2019) Compared to LAN, a WAN has additional hardware
requirements such as access servers, modems, routers etc. This high tech requirements
would mean that HSBC might hire a third-party specialising in IT services to build its
WAN.
These uses of computers and networks in the banking sector has improved banks' quality
to serve its customers and increase productivity with respect to account management, while
streamlining the back-office operations. All these factors has played a key role in levelling

Artificial intelligence also enhance the better business operations so that they can perform the
various task in an appropriate manner. The Artificial intelligence also enhance the better business
operations so that they can perform the various task in an appropriate manner. playing field in
terms of competition. As smaller banks have access to the same network technology as large
banks like HSBC. (Liu, Z 2022)This has ensure that the competition in the banking sector
become more efficient. Banking activities such as updating customer accounts, has become
automated which has allowed companies like HSBC to update and maintain customer records.
Having a centralized data records has even increased the efficiency of tellers and other banking
personnels.
An upgrade in the hardware technology has allowed HSBC to advance wireless banking
and telecommunications which has facilitated many facets to the banks capability thus allowing
it to not only expanding its customer base but also to reduce administration costs. Additional
benefit of this is by receiving transactions from affiliated branches of the bank.
A bank's main function consists of performing electronic transactions. Customer's cash or
cheque deposits is an example of an electronic transaction. And enhancements in computer
technology has provided banks with encryption capabilities to keep the data on its LAN and
WAN from being compromised during transmission.
Having dedicated company networks and servers has enabled HSBC to develop its web-
based banking. Certain computational power of the bank's network is reserved for maintaining
and running its internet applications. The banking sector regulation required HSBC to secure its
servers and authenticate the devices logged on to the network. Given HSBC's private network
allows to integrity of the network's infrastructure. Especially vulnerable data such as customers'
login credentials etc. which is done by maintaining several checkpoints before entering the main
system.
Impact of Artificial Intelligence (AI) in enhancing their businesses.
 Reduced operational cost – By implementing artificial intelligence into a business
business owners can save a lot of operational costs as AI automatically does a lot of work
of staff or employees. AI software are very expensive but in long term artificial
intelligence helps a business to save a lot of money as it can do more work in less time.

For smaller companies, artificial intelligence is difficult to implement because of its
expensive cost and maintenance cost. HSBC bank is using artificial artificial intelligence
which helps them to reduce their cost of employees and researchers.
 Faster and efficient working – Artificial intelligence has the ability to to perform
algorithms continuously and faster to analyse a big data and predict outcomes.
(Benoit, ,2019) It also helps in doing repetitive tasks such as sending emails, messaging
employees about various information etc. Human resource work is becoming more faster
and efficient such as contacting and messaging applicants, scheduling interviews,
providing information etc. because of artificial intelligence. Data is processed more faster
and accurately for further use in HSBC bank which brings a great efficiency to the
organisation due to artificial intelligence. It helps in processing data and approaches new
customers automatically through different sources such as emails, calls, messages etc.
 Consumer satisfaction – The most crucial and important aspect of the business is to
provide satisfaction to customers which is also the difficult part. Customer trust is the
main key for promoting and growth of a organisation. HSBC bank is providing efficient
and faster communication for fulfilling customer's demand through artificial intelligence.
This helps the bank to create brand loyalty among the customers which helps in growth
of the organisation. It directly reduces the human help needed to solve the queries even
complex ones. Also AI reduced the time for researching problems then fix it.
 Information security – Malware targets the mistakes done by humans to hack the data
of a company. Artificial intelligence is the best option as it makes the computers and
networks safer by removing malware and spams. Artificial intelligence is used by the
HSBC bank to protect data from hackers as their data is an important part of the
organisation. AI also enhances the financial security which is very important for banks to
set up. A smooth and secured process is needed for the money transactions which is
created by artificial intelligence.