Impact of Information Technology on HSBC Bank: A Report

This report examines the critical role of Information Technology (IT) within HSBC Bank, a major global financial institution. It explores how IT facilitates effective data management, enhances customer service through tools like CRM, and contributes to overall business success. The report also delves into the ethical and social issues associated with IT, including data security breaches, privacy concerns, and the impact of automation on employment. It differentiates between various networking technologies such as LAN, WAN, and PAN, highlighting their applications within HSBC's operations. Furthermore, the study analyzes the significance of the Internet and Intranet for communication, customer interaction, and internal collaboration. Finally, it outlines the stages of the system development life cycle (SDLC) and its importance in providing high-quality services. The report concludes with a discussion of how IT can both contribute to and hinder business success, emphasizing the need for ethical practices and robust data security measures within HSBC.

Individual
Report

Abstract
Information technology is concerned with the use of computers, network and other
software to create, process, store, secure and exchange all forms of electronic data. Information
technology has proved to be of great importance for businesses as it has helped them in effective
data management, improved decision-making and also in solving complex problems. The current
report is based on HSBC bank and it highlights various ethical and social issues associated with
IT along with its importance in business management.

Table of Contents
INTRODUCTION...........................................................................................................................2
LITERATURE REVIEW................................................................................................................2
ANALYSIS AND DISCUSSION...................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
IT stands for information technology and over the years, it has changed the way how a
business performs as it has made all the business work very easy. Every business whether big or
small needs IT services in order to gain productivity in their vast organization. HSBC (Hong
Kong and Shanghai banking corporation) is a British multinational bank headquartered in
London, United Kingdom and is considered to be the 7th largest bank in the world by size and
revenue. The company was established in the year 1865 by Sir Thomas Sutherland and as of now
it has 3,900 offices in 67 countries (HSBC company profile, 2019). HSBC provides various
services to its customers like retail banking, corporate banking, investment banking and wealth
management services. The current study will highlight the importance of information technology
in the success of HSBC bank and other ethical and social issues pertaining to the business.
Further, it also depicts ethical aspects associated with technology. Report will also develop
understanding about different types of networks and entails the significance of internet &
intranet in the context of business unit.
LITERATURE REVIEW
Theme 1: Role of IT in success or failure of business.
Information Technology has played a significant role in the growth of an organization as
it provides technical support to the company which reduces the burden on the individuals and
help them to focus on the core activities of the business. Information technology also helps the
business to make better decisions and solve complex problems more efficiently and effectively.
In the view point of (Larson and Malone, 2015), Information technology has improved the
communication level both inside and outside the organization through digital technology and it
has also helped in easy sharing of important documents and files with the help of data
transmission and transfer software that helps an organization in achieving cost and time benefits.
However, (Vanpoucke, Vereecke and Muylle, 2017) argued that IT has increased automation in
the banking industry to a great extent. This in turn resulted into less employment opportunities
within the service based industry. Also, technology and machines are less reliable as compared to
human beings and can be hacked or controlled easily and it is a big threat to every organization.
According to Stergiou and et.al., (2018), cloud computing is the most effectual techniques which
can be used by the business unit for ensuring proper management of data storage, servers,
databases, networking and software. However, on the critical note, Li and et.al., (2018) said that
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for capitalizing benefits associated with cloud computing business unit has to depend on internet
connection.
Theme 2: Ethical and social issues pertaining to running business.
Ethics refers to the various rules and regulations that guide the behaviour of the
individuals. There are various ethical and social issues concerned with information technology
while running a business like hacking, viruses and privacy. These ethical issues affect the overall
productivity of an organization and can also hamper the brand image of the company. In the
view point of, HSBC has faced several issues and controversies in relation to data loss that has
hampered the overall profitability of the banking company. This in turn recognized as ethical
issue because business unit has accountability in relation to secure data and privacy errors.
Theme 3: Different types of networking technologies.
Networking technology is concerned with the process of creating networks by the use of
optic cable, satellites and other wireless connections to transfer data, information and
communicate in different parts of the world. According to (Wang, Chen and Benitez-Amado,
2015), Multinational corporations like HSBC bank use Wide area network (WAN) as it helps in
connecting computer together across huge physical distances. It helps in easy communication
between all the employees and thus helps in timely achievement of goals and objectives.
In the view point of (Patrick, 2018), local area network (LAN) is the most widely used network
service by the companies as it is easy to set up, use and also considered to be the simplest type of
network. LAN'S help in connecting groups of computers together and low voltage devices
together according short distances to share data and information. LAN is widely used in offices
and businesses as it provides proximity between different computer networks in a building.
Theme 4: Importance of Internet and Intranet in business.
Both Internet and Intranet provides great significance to the business, from facilitating
communication to opening new markets it has incessantly contributed towards the growth and
success of a business. In the view point of (Mocetti, Pagnini and Sette, 2017), the internet
creates value for businesses through networking, information retrieval, communication and sales.
HSBC bank uses the internet to offer goods and services to its customers and also to interact with
the employees, government and other parties. Also, the internet helps the companies in
enhancing the overall customer experience and to maximize their satisfaction level.
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According to (Jolly, 2016), intranet is a private network that can be accessed by only authorized
users. HSBC banks uses intranet facility in order to improve coordination and collaboration
between the employees in the organization. It also helps in the smooth sharing of important files
and documents to maintain the confidentiality and security of data.
Theme 5: Different stages of system development life cycle.
The system development life cycle is a software that involve different stages required in bringing
a project from the beginning to its completion. In the view point of (Peterson, Tyra, and Mikula,
2018), there are 7 steps involved in the entire process and it is very useful for the businesses as it
helps in reducing the costs and increasing the profitability of the company. Also, it helps the
company in achieving competitive advantage by providing better quality services.
According to (Ghalenooie and Sarvestani, 2016), the SDLC provides high quality
products and services to its customers as per their requirements that further help in improving the
brand image of the organization.
ANALYSIS AND DISCUSSION
Role of IT in the success and failure of business
Information technology drives innovation and innovation plays a major role in the
success of an organization. HSBC bank heavily relies on information technology for its day to
day operations as it has helped in reducing the operating cost and contributed towards the
increasing profits of the organization. Also, with the increasing competition in the banking
industry, it had become imperative for the HSBC banks to implement the use of the latest
technologies as it would help the organization to quickly respond towards the changing trends of
the market. Role of IT in success of business is as follows:
 Effective data management: It is imperative for a business to manage and store data
effectively and efficiently in order to achieve the organizational goals and objectives.
HSBC bank uses IT services to ensure detailed assessment of business needs and also a
scrutiny of organizational landscape (Wu, Straub and Liang, 2015). The banking data
includes private and confidential information about consumer’s accounts and other
financial statements and with the help of IT software or system such as cloud computing,
the information is backed up and secured which avoids confusion and complexity in the
organization.
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 Improved customer services: The HSBC bank uses various IT tools like CRM
(customer relationship management) in order to enhance the overall experience of its
client and customers that further helps in improving the brand image of the organization.
The customers are assisted through various channels like E-mail, websites, telephone and
social media.
Role of IT in the failure of business:
 Data security: The IT also hampered the image of HSBC bank as the company faced
legal allegations in the year 2008 regarding the loss of confidential data of its consumers.
Also, the company has been associated with leaking the client details to third parties
without their permission which has further affected their growth prospects and also
reduced the market share.
 Complex procedure: The use of information technology is not only complicated for
consumers but also for the employees in an organization. Certain employees at HSBC
bank find it difficult to use digital technology and also commit a lot of errors and
problems that further hamper the productivity of the company. For example: When bank
introduces new sites or apps for customer convenience regarding queries and other issues
then employees face difficulty. Moreover, they do not have proper knowledge about
newly designed app or website. Thus, in the absence of effectual trainer and training
session company cannot get success with regards to IT advancement.
Ethical and social issues associated with the business
There are various ethical and social issues faced by HSBC bank in relation to information
technology and the major issues are related with the breach of privacy and data. The company
has been an active participant of legal controversies regarding the breach of data which has
impacted the image of the business and reduced their profitability in the long run. Moreover,
HSBC has also been negligent about protecting and preserving the consumer information as the
company uploads the data on cloud servers that could be hacked easily therefore it has reduced
the trust and reliability of consumers and therefore it led to reduced market share of the bank.
Thus, it is the duty of HSBC bank to emphasize on providing better services to consumers by
protecting the data and ensuring higher safety measures in their organization.
In addition to this, HSBC also faces social issues due to usage of advanced information
technology. Moreover, HSBC focuses on using IT aspects ethically by preventing misuse. Along
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with this, it emphasizes on following common principles that benefit to the society. However, for
understanding customer’s need and preferences business unit gathers data about customers
without giving prior information to them. For instance: In order to enhance customer base HSBC
gathers information about potential customers using IT techniques. In this way, social issues are
facing by HSBC.
Differentiate between different types of networking technologies.
Network technology is a technology by which two or more computer systems are connected
in order to communicate information effectively and efficiently. Every company uses network
technologies in order to ensure smooth flow of information in the business.
Basis of difference LAN WAN PAN
Known as Local area network Wide area network Personal area network
Area LAN is also called as
single site network
that connects
computer systems
over a short distance
A WAN is a
collection of LAN
that are
geographically
dispersed all around
the world.
A PAN is a computer
network for inter
connecting the
devices centred on an
individual's
workspace.
Use The HSBC has more
than 3000 offices
located all around the
world and every
office branch uses a
LAN network in order
to have safe and
secured
communication and
sharing of
information.
The WAN uses
satellites and
telephone lines to
establish a network
between
communication
technologies.
Bluetooth and infra-
red data association
are wireless sources
of persona area
network.
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LAN and WAN are the two most common computer networks used by HSBC banks as it
keeps the data safe and secured from hacking, viruses, phishing and other threats.
Importance of Internet and Intranet in business.
Internet plays an important role in the growth of the business because it has opened a different
market for the companies and thus helped in increasing their sales and profitability. HSBC bank
has gained a lot of consumers after spreading their operations online which has also reduced their
service cost and increased the organization's customer base. Moreover, HSBC provides unique
services to its clients that helps in enhancing the overall banking experience for them and thus
leads to maximum consumer satisfaction.
On the other hand, intranet is concerned with a private network that uses internal
communication within an organization. Intranet is a business tool that has helped HSBC bank in
increasing employee engagement and business productivity with adequate management. The
major benefit of intranet is that it helps the employees of HSBC to smoothly communicate with
each other and share important information between teams and departments. Also, it has helped
in automating operations to enable better decision-making.
Different stages of system development life cycle:
 System planning: System planning is the first step in the process and it is concerned with
proper planning regarding the information system interface and other designs.
 System analysis: It will help in analysing the performance of software and make better
decisions.
 Design: The designing step is concerned with preparing a blue print of software and
includes designing of application, network and database.
 Development: This step involves building of information system where hardware is
purchased and installed and then software is run effectively.
 Implementation: The last step involves implementation of the software. It must be tested
and then must be run into the computer system.
Potential benefits and drawbacks related to IT investment
In the recent times, with the motive to deliver quality services to the customers and attain
high market share business units emphasize on making investment in advanced information
technologies. However, there are several pros and cons which in turn associated with IT
investment such as:
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Pros
 Sales and profit maximization
 It helps in saving time
 Facilitates improvement in data storage, file management and data reporting
Cons
 Imposes high cost in front of company as implementation of advanced technology
requires intense training
 Risk pertaining to security breaches occur in the case of using IT
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CONCLUSION
From the above study, it can be concluded that information technology plays an
important role in the success and growth of a business. Banking companies heavily rely on
technology to ensure that maximum satisfaction is provided to its customers. There are certain
ethical and social problems associated with information technology and it is the duty of company
to follow the ethical code of conduct to avoid legal consequences. Thus, it can be concluded that
internet plays an important role in the growth of business if used effectively.
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REFERENCES
Books and Journals:
Al-Mawahreh, L. R. and Abdel, M., 2019. The Impact of Modern Technology on the Customer
Relationship Management A Study of Jordanian Banks.
Ghalenooie, M. B. and Sarvestani, H. K., 2016. Evaluating human factors in customer
relationship management case study: Private banks of shiraz city. Procedia Economics and
Finance. 36. pp.363-373.
Jolly, V., 2016. The Influence of Internet Banking on the Efficiency and Cost Savings for Banks’
Customers. International Journal of Social Sciences and Management. 3(3). pp.163-170.
Mocetti, S., Pagnini, M. and Sette, E., 2017. Information technology and banking organization.
Journal of Financial Services Research. 51(3). pp.313-338.
Nor, K. M. and Pearson, J. M., 2015. The influence of trust on internet banking acceptance. The
Journal of Internet Banking and Commerce, 2007.
Patrick, H. A., 2018. Impact of leadership strategies of managers on employees in information
technology organizations. Journal of Contemporary Management Research, 12(1), pp.1-13.
Peterson, R. D., Tyra, A. S. and Mikula, J. C., Amazon Technologies Inc, 2018. Dynamic
customer relationship management while maintaining customer privacy. U.S. Patent
9.978.070.
Online
HSBC company profile. 2019. Online. Available through:
<https://www.bloomberg.com/profile/company/1639466D:LN>
. 2019. [Online] Available Through <>
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