Report: IT's Transformative Impact on Banking and Finance Sector

This report delves into the significant role of Information Technology (IT) within the banking and finance sectors, highlighting its transformative impact on the industry. It explores various IT applications, including online banking, mobile banking, and electronic fund transfers, and examines the advantages such as enhanced customer service, operational efficiency, and global reach. The report also addresses the risks associated with IT implementation, including data breaches, cyber threats, and security vulnerabilities, and emphasizes the importance of robust security measures and risk management strategies. Furthermore, it discusses the planning, design, and installation of IT systems, and highlights the need for continuous monitoring and maintenance to ensure optimal performance and security. The report provides an overview of IT's impact on business survival, covering electronic payment methods, internet banking, and e-commerce, and concludes by summarizing the key findings and emphasizing the importance of IT in the future of banking and finance.

Running head: IT IN BANKING AND FINANCE
IT in Banking and Finance
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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Information Technology in Banking Sector...........................................................................3
Importance of Information Technology for business survival...............................................4
Planning, designing, installing IT into Business....................................................................5
Use of IT in Banking and Finance.........................................................................................5
The benefits and advantages of IT bring to the banking and finance sector..........................6
Risks that IT bring into business and finance........................................................................7
Maintaining and monitoring IT in banking and finance........................................................8
Conclusion..................................................................................................................................8
References................................................................................................................................10

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Introduction
This report will discuss the role that information technology (IT) plays in the banking
and financial sectors. Banking and finance industry helps in boosting the economic growth of
a nation. To support the commercial, industrial, agricultural and other type of service sectors,
the banking sector in Australia plays a vital role (Kelly and et al. 2019). The information
systems exposed various numbers of technology schemes such as Mobile Banking, Net
banking, Ticket Booking, Shopping, Fund transfer, Bill payment, Automated Teller Machines
(ATM) that helps to growth in business worldwide. The banking industry is the pillar of the
Australian financial system. With the help of the Internet, Information technology has to turn
into a significant factor for most of the commercial organizations in Australia. The
information technology is capable of transforming and integrating electronic commerce into
the traditional business model, therefore providing facilities to their customers and business
as well (Whincop 2017). In fact, a maximum number of banks in the world have maintained
their business strategy to retain competitive benefits to the industry, enhance the performance
and reduced the operational cost by providing an efficient online banking system to the online
banking customers.
Discussion
Information Technology in Banking Sector
Nowadays, the banking environment has become very competitive. The various banking
sector is running the latest technology to expand the business over the world. Information
technology provides supports for sophisticated development of products, enhanced market
infrastructure, development of reliable techniques which helps to control risks associated with

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various delivery channels and transactions of the organization. The information technology
plays an essential functionality in financial and banking organization and provides services
for them. Online fund transferring, issuing drafts, lending drafts, protection for the public
money, exploring commercial opportunities, and investment policies are being provided. The
users can be able to view their accounts, check account statements, purchase drafts and
transfer funds just clicking a few keys (Shaikh and Karjaluoto 2015). The various services
that IT offers to the banking institutions and their customers are the following:
 ATM
 Credit Cards
 Debit Cards
 DeMAT Accounts
 EFT (Electronic Fund Transfer)
 Mobile Banking
 Telephone Banking
 Internet Banking
 EDI (Electronic Data Interchange)
Importance of Information Technology for business survival
It can be observed that the three main advantages that information technology bring
into business – electronic payment method, internet banking, exchanging of information,
services electronically.
E-payment method – The term e-payment refers to transferring money or funds
electronically (Löfsten 2016). Therefore it reduces the traditional paperwork at banking

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organization. Customers have made payment for their purchases from cash, checks, debit
cards or credit cards are clearly electronically processed.
Internet banking – The term internet banking is a leading office technology. Most of
the banks in Australia offer internet services accessible through the Internet and ATM and
physical offices to customers from various perspective (Gill, Bunker and Seltsikas 2015). A
"clickand-mortar" strategy has been implanted, which adds some additional facilities for the
bank transaction.
E-commerce – It defines the availability of services to customers through the use of
information technology (for example, electronic fund transfer).
Planning, designing, installing IT into Business
The banking organization needs to plan a project management strategy to construct
and design delivery processes for controlling the primary factors which ensure that the client
access the facility to fulfil their expectations. To successfully apply IT for the implementation
of banking system management the organization needs to schedule planning, costing
designing, installing and provides training which offers guidance to the whole organization to
effectively and successfully improve the performance and quality of the application
(Kulikova and et al. 2016). It is crucial to build a quality project/application so that the client
would be easily capable of using it. The project needs to be planning, designing and
programming so that it can help to deliver the quality project with estimated cost as well as
avoiding estimated delays (Campanella, Della Peruta, and Del Giudice 2017.). One planning
has been done; the project is designed according to the requirement. All the conditions are
necessary for the implementation of the project so that the overall project quality reduce
timing and costs to deliver it.

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Use of IT in Banking and Finance
The technology has been changed in the last few decades. Today, technology has
become the centre of the business to succeed. From security to marketing, most of the
business operations require the digital world to expand the business market (ADDY 2016).
The way of researching, shopping, interacting, dealing with various business operating
technology would be necessary. The tech industry changes the style of modern business:
Today most of the company have done their business processes through the various
information technology (Schwalbe 2015). However, businesses need efficient external and
internal communication to run business processes related to the banking and finance
industries. It simplifies the way of communication between individuals and organizations.
The external communication involves communication between customers, investors,
the general public and the potential customers with a financial organization or other
companies. This can be done by email, online newsletters, social media platform and other
business platforms.
The internal communication involves communication between a business and
different subparts of the business. The information technology helps by sending internal
newsletters emails by using the company's digital platforms.
The benefits and advantages of IT bring to the banking and finance sector
The technology brings lots of facilities to the organizations as well as to the customers.
Benefits to banking organization - The banks can endorse their services and product
by using information technology. There are various online banking services that the

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organization provides to its customers includes transactional activities such as bill payment,
fund transfer, loan application and transaction (Tasca and et al 2016). Non-transactional
activities such as stop payment, updating information, chequebook request, online statement
etc. Various online services such as investment, loans options are there in the application. It is
reducing the chances of misappropriation and fraud, reducing the customer’s visits in the
branch.
Benefits to customer- It is easy to open an online account and simple to operate.
People would not require to be standing in the queue to deposit money into the bank or
withdraw money from the bank. It is convenient as it provides a simple interface to the user
for payment of bills, transferring money from anywhere in the world just following simple
steps. IT can make it easy to view your transactions, provides support for 24x7 hours for the
customers. Anyone can manage their purchase by sitting at home; they only need to access
their internet connection (Malaquias and Hwang 2016). IT support an efficient and fast
technique to transfer money and to share information from any time at anywhere, even on
holidays whenever the bank is closed. Customers can keep their eye on the account balance
and check every transaction all the time.
Risks that IT bring into business and finance
The financial and banking organization has undergone a severe transformation which
is caused by external and internal factors includes the transformation of the business model,
adaption of various advanced technologies, changes in regulatory environments, etc. In
modern days the banking sector comprises different stakeholders from a diverse background
– start-ups, tech companies, Internet – plays an influencing role (Gepp and Kumar 2015.).
The complexity in the financial industry is repeatedly increasing due to the use of various

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new technologies, which brought risks in the banking organization globally. The chances are
associated with the uncertainty of some event to occur. In the financial industry, the bank has
borne to various losses due to impulsive risk in the organization involve cyber threats such as
file destruction, data theft, compromised accounts, or degraded system (Naqvi 2017). The
original safety features that banks offer their customers include general online privacy and
security information for the customer who accesses the internet banking, support, monitoring,
assistance, system security privacy etc. However, this is not only the risks.
Maintaining and monitoring IT in banking and finance
The banks should provide a better transaction process or better authentication
mechanism to improve their technological security and privacy measures related to
information technology such as protection for the Internet fraudulent (Chorafas and
Steinmann 2016). The banking and finance sectors can organize a state government and local
agencies such as Australian Taxation Office(ATO) to construct a better confidentiality, privacy
and security for the system, enhance the performance of the system and provide better
internet banking facilities such as protecting personal as well as financial information, data
theft protection, cybercrime protection, identify fraudulently, etc.
Furthermore, the banking and financial organization currently employ a 128-bit SSL
encryption or a 256-bit encryption mechanism. These two standard validation checking
methodologies provide better privacy security to both potential and existing customers of
internet banking technology. The banks must be aware of customer’s opinion, concerns,
demands, and expectations such as monitoring transaction activities, concerns about mobile
and online threats, robust security and privacy techniques for accessing online activities,
conducting and offering a survey for the customer’s feedback (Laudon and Laudon 2016). In

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addition, the banks required to provide a link so that the user can download antivirus and
upgrade it, and the internet firewall protections or security software as well.
Conclusion
The research result of the information technology in banking organization revealed
various exciting issues. Most of the Australian banks offer their consumers to access standard
applications or technologies with optional security services. The technology in banking and
finance organization brings a lot of facilities to the customer, stakeholders and the banking
organization; this gives 24x7 hours services to the users all over the world. Since the
applications are accessed via the Internet, there are various security issues such as data
breaches, enclosure of sensitive data, are associated with it. Therefore, all the banks in
Australia required to enforce a compulsory two-factor authentication technique to log in to
the system for the secure transaction. Furthermore, an effective and good security policy
which is employed by most banks and enforced, so that they can improve their security
provided by the information technology.

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References
ADDY, D.N., 2016. Adoption of electronic banking in the ghanaian the banking system: A
Case Study of Ghana Commercial Bank (Doctoral dissertation).
Campanella, F., Della Peruta, M.R. and Del Giudice, M., 2017. The effects of technological
innovation on the banking sector. Journal of the Knowledge Economy, 8(1), pp.356-368.
Chorafas, D.N. and Steinmann, H., 2016. Implementing networks in banking and financial
services. Springer.
Gepp, A. and Kumar, K., 2015. Predicting financial distress: a comparison of survival
analysis and decision tree techniques. Procedia Computer Science, 54, pp.396-404.
Gill, A., Bunker, D. and Seltsikas, P., 2015. Moving Forward: Emerging Themes in Financial
Services Technologies' Adoption. CAIS, 36, p.12.
Kelly, S., Edwards, M., Klettner, A. and Brown, P., 2019. Unlocking Australia's Sustianable
Finance Potential.
Kulikova, N.N., Smolentsev, V.M., Tikhonov, A.I., Kireev, V.S. and Dikareva, V.A., 2016.
Planning of technological development of new products and its impact on the economic
performance of the enterprise. International Journal of Economics and Financial Issues,
6(8S), pp.213-219.

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Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education
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Löfsten, H., 2016. Organisational capabilities and the long-term survival of new technology-
based firms. European Business Review, 28(3), pp.312-332.
Malaquias, R.F. and Hwang, Y., 2016. An empirical study on trust in mobile banking: A
developing country perspective. Computers in Human Behavior, 54, pp.453-461.
Mocetti, S., Pagnini, M. and Sette, E., 2017. Information technology and banking
organization. Journal of Financial Services Research, 51(3), pp.313-338.
Naqvi, T., Waheed, A., Mahmood, H. and Rafique, M., 2017. Impact of Political Instability
on Financial Development of Pakistan. International Journal of Management Sciences and
Business Research, 6(4).
Schwalbe, K., 2015. Information technology project management. Cengage Learning.
Shaikh, A.A. and Karjaluoto, H., 2015. Mobile banking adoption: A literature review.
Telematics and informatics, 32(1), pp.129-142.
Tasca, P., Aste, T., Pelizzon, L. and Perony, N., 2016. Banking beyond banks and money.
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Whincop, M.J., 2017. Bridging the entrepreneurial financing gap: Linking governance with
regulatory policy. Routledge.