University Report: Impact of Technology in the Finance Domain

This report examines the impact of technology on the finance domain, drawing on several academic articles. It begins with a brief overview of the theoretical background, focusing on the influence of technology on banking, insurance, and financial services, and the adoption of information technology. The report then identifies common themes across four articles, including the impact of IT on the banking industry, digital transformation in banking, the value of e-business, and fraudulent financial reporting. It further explores different themes within these articles, highlighting fraud mechanisms, the technology-organization-environment framework, and the crucial transformations in banking. Managerial implications are discussed, emphasizing the need for managers to focus on database management, cloud services, cyber risk, and new tools for combating cybercrime. The report also addresses the limitations of the studies and suggests directions for future research, such as considering the effects of changing technology and security and other factors that might affect the value creation of e-business.

Running head: IMPACT OF TECHNOLOGY IN FINANCE DOMAIN
Impact of technology in finance domain
University Name
Student Name
Authors’ Note

2IMPACT OF TECHNOLOGY IN FINANCE DOMAIN
Table of Contents
Brief summary of the theory......................................................................................................2
Common themes across four different articles...........................................................................2
Different themes across four different articles...........................................................................5
Managerial implications of the four articles..............................................................................6
Study limitations and future research directions in four articles................................................7
References..................................................................................................................................9

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Brief summary of the theory
Impact of technology expends on banking, insurance as well as financial services: Economic
recession adversely influenced technology spending by businesses. Differentiation model: In
order to cope with the observation that banks deliver highly differentiated product, a simple
differentiated model can be adopted. There are some alterations that are carried out in a bid to
consider the network externality generated by the adoption of information technology (IT).
As rightly indicated by Philippon (2015), there is market equilibrium after adoption of
information technology and draw from three testable conclusions regarding the association
between performance of market and IT expends.
Common themes across four different articles
There are certain common themes across four different articles that concentrate on impact of
technology in finance domain.
The article “ The impact of Information Technology on the Banking Industry: Theory and
Empirics” penned by Shirley J. Ho and Sushanta K. Mallick helps in development and
examination of model to scrutiny the influence of information technology (IT) in the banking
industry. Essentially, it is said that information technology can enhance performance of the
bank in two different ways. In particular, information technology can lessen operational cost;
facilitate various commercial transactions among consumers within same network.
Particularly, empirical studies have reflected inconsistency on the hypothesis; some are in
agreement with the Solow Paradox (Redlinger et al. 2016). However, there are some
empirical studies have adopted production function approach; it is intricate to recognize
which effect has dominated. Therefore, the reasons attributed have been the variance in

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econometric methods and measurements. In essence, this research paper intends to illustrate
the inconsistency model with specific network effects.
The article “Digital Transformation in Banking- The Future of Banking” presents the fact that
digital transformation is way beyond traditional banking to a specific digital world. In
essence, this is a crucial transformation in the way banks along with other financial
institutions learn about, interact and satisfy their customers. Essentially, an efficacious
transformation due tom digital revolution starts with comprehensive understanding regarding
digital customer behaviour, tastes as well as preferences along with unstated needs and many
others. Vogel (2014) mentions this transformation directs toward major alterations
incorporations, from production-centric to particularly customer centric point of view.
The article “Information technology Payoff in E-business Environments: An International
Perspective on Value Creation of E-Business in the Financial Services Industry” stated by
Kevin Zhu, Kenneth L. Kraemer & Jason Dedrick. Technology-organization-environment
framework helps in research model for evaluating the value of e-business at the level of the
firm. In essence, e-business value is inspired by economic environments, the two different
subsamples from developed as well as developing nations. Founded on structural equation
modelling, empirical evaluation shows different important findings (Qiu et al. 2018). In
essence, within TOE framework, particularly technological readiness stems as the strongest
facet for e-business value, whilst financial resources, worldwide scope along with regulatory
environment also considerably contribute towards e-business value. Again, firm size is also
negatively associated to value of e-business, recommending that structural media related to
huge firms have the inclination to retard overall value of e-business. Again, this article
presents the opinion that financial resources are also a significant facet in different
developing nations, technological abilities become far more important in different developed
nations. This recommends that as firms move into deeper phases of e-business value shifts

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from particularly monetary spending to different higher dimensions of organizational
potential. Also, government regulation plays much more important role in developing nation
than in developed nations (Wu et al. 2015). These findings indicate the effectiveness of
proposed research model as well as theoretical structure for examining e-business value.
They also deliver deep insights for both businesses as well as policymakers.
The article on “Fraudulent Financial Reporting:” replicates fraud instances in financial
assertions. There are three different volatile sectors namely technology, financial services
along with health care services. This study also points out significant corporate governance
variances between fraud companies and no fraud benchmarks on particularly an industry
wide basis. In essence, the fraud mechanisms utilized vary considerably across different
industries, with specific revenue frauds occurring in different technology corporations and
asset frauds along with misappropriations in financial service corporations (Clayton et al.
2014). Three industries are selected for the purpose of the present study. In this case, the
sample fraud organization has necessarily very weak mechanisms of governance, diverse
fraud corporations operating in the arena of technology as well as financial service sectors.
These sectors also have few audit committee whilst fraud companies operating in all the three
different industries have comparatively less dependent committee for audit and relatively less
independent boards. Furthermore, this study also delivers initial substantiation regarding the
fact that fraud corporations in the area of technology as well as health care sectors have
comparatively few audit committee programs and meetings. In addition to this, the fraud
corporations operating in all the three different firms also possess different internal audit
support. In addition to this, the current study also contributes by updating comprehensive
understanding regarding fraud techniques along with risk factors in three different industries
(Sun et al. 2014).

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Different themes across four different articles
This study on fraudulent financial reporting talks about fraud mechanisms utilized varies
considerably across different industries, with specific revenue frauds. This occurs in different
technology corporations and asset frauds along with misappropriations in financial service
corporations (Philippon 2016). The theme of this article is to throw light on fraud
mechanisms and the way to overcome fraudulent financial practices using technological
developments.
The article “Information technology Payoff in E-business Environments” replicates e-
business value at particularly the firm level. The theme that is taken into consideration
include Technology-organization-environment. This is necessarily a framework that helps in
research model for evaluating the value of e-business at the level of the firm (Laeven et al.
2015). In essence, e-business value is inspired by economic environments, the two different
subsamples from developed as well as developing nations.
The article “Digital Transformation in Banking” replicates that digital transformation can be
considered to be a way beyond conventional banking to a particular digital world. The theme
is somewhat different from that of the other studies and talks about crucial transformation in
banks along with other financial institutions. The crucial transformation helps in learning
about, interacting and satisfying their customers. This helps in improvement and assessment
of model for assessment of impact of information technology in particularly the banking
segment (Bai et al. 2016).

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Managerial implications of the four articles
Examination of technological advances helps in understanding the implications. There needs
to be a shift in economic power in the entire world and climate alteration tom urbanisation,
demographic alterations. The technological influences on finance industry help in
comprehending the alterations, and deliver certain suggestions regarding ways to prepare for
specifically opportunities as well as threats ahead. In addition to this, managers have the need
to concentrate on enterprise data base, warehousing of data, diverse cloud services. Managers
have the need to undertake API scheme, handle issues regarding planning a hybrid integration
strategy (Dabla-Norris et al. 2015). Managers have the need to adopt the hybrid integration
stratagem that can help in developing technological factors. The implications for managers in
this regard is therefore to proactively handle cyber risk as well as regulation, build and at the
same time execute strategic cyber security map. Managers can also institute a commercially
justifiable cyber security potential. Furthermore there is need for development of world class
cyber response, acquire, alignment of cyber security team with risks of business. This can
help in establishment of governance as well as lines of reporting for maintenance of cyber
security. In addition to this, the managers also have the need to devise new tools for the
purpose of fighting diverse cyber crime. In itself, financial institutions can necessarily
augment their own capability to handle the cyber risk. For instance, financial institutions can
necessarily apply different state of the art systems of data mining. Therefore, new tools can
be developed for particularly fighting cyber crime. As rightly mentioned by Bai et al. (2016),
financial institutions can enhance their capability to handle cyber risk. For instance, financial
institutions can develop technologies for the purpose of detection of diverse anomalies in
areas of financial security as well as fraud applications, utilizing specific data from structured
as well as unstructured sources (Philippon 2015). Additionally, the company can also
establish an innovative accounting information system that can help in establishment of

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connections of business to business, connections between business to customers, and
development of accounting data base, warehouses of data and many others.
As correctly mentioned by Wu et al. (2015), financial institutions have the need to work with
particularly their vendors to comprehend policies of data as well as limitations of APIs.
Essentially, this can consider services that can be exposed and at the same time consumed at
particularly the user interface. Again, there is need for transitioning data to the cloud and
there are different ways to transfer data into particularly public/private cloud environment.
Managers also need to take into account matters of security as there is a component of risk at
the time of exposing data for particularly system consumption (Redlinger et al. 2016).
Study limitations and future research directions in four articles
The limitations of the study “The impact of Information Technology on the Banking
Industry” is that there subsists a negative association between IT investment as well as levels
of price. Again, technological advances in the banking industry taken into consideration do
not consider the effects of altering technology, and security. The limitations of automations
permit for automation of accounting by way of transferring data to particularly multiple
reports as well as systems (Redlinger et al. 2016).
The article “Digital Transformation in Banking- The Future of Banking” delivers the fact that
digital transformation is way beyond conventional banking to a specific digital world.
The article “Information technology Payoff in E-business Environments” replicates e-
business value at particularly the firm level. This study takes into consideration six different
facets that include technology readiness, worldwide scope, and financial assets, size of firm,
intensity of competition and regulatory environment (Redlinger et al. 2016). Thus, the study

9IMPACT OF TECHNOLOGY IN FINANCE DOMAIN
fails to consider other factors in this study that might perhaps affect value creation of
particularly e-business.
This study on fraudulent financial reporting throws light on fraud mechanisms and the way to
overcome fraudulent financial practices using technological developments. Assessors have
the need to take into account the industry context since they analyse risk of financial risk and
ways of alleviating the same (Redlinger et al. 2016). This study presents initial substantiation
regarding technology, financial services as well as health care. The other industries are not
taken into consideration in this study.

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References
Aydalot, P. and Keeble, D., 2018. High technology industry and innovative environments: the
European experience. Routledge.
Bai, J., Philippon, T. and Savov, A., 2016. Have financial markets become more
informative?. Journal of Financial Economics, 122(3), pp.625-654.
Clayton, T., Spinardi, G. and Williams, R., 2014. Policies for cleaner technology: a new
agenda for government and industry. Routledge.
Dabla-Norris, M.E., Kochhar, M.K., Suphaphiphat, M.N., Ricka, M.F. and Tsounta, E.,
2015. Causes and consequences of income inequality: A global perspective. International
Monetary Fund.
Laeven, L., Levine, R. and Michalopoulos, S., 2015. Financial innovation and endogenous
growth. Journal of Financial Intermediation, 24(1), pp.1-24.
Philippon, T., 2015. Has the US finance industry become less efficient? On the theory and
measurement of financial intermediation. American Economic Review, 105(4), pp.1408-38.
Philippon, T., 2016. The fintech opportunity (No. w22476). National Bureau of Economic
Research.
Qiu, M., Gai, K., Thuraisingham, B., Tao, L. and Zhao, H., 2018. Proactive user-centric
secure data scheme using attribute-based semantic access controls for mobile clouds in
financial industry. Future Generation Computer Systems, 80, pp.421-429.
Redlinger, R., Andersen, P. and Morthorst, P., 2016. Wind energy in the 21st century:
Economics, policy, technology and the changing electricity industry. Springer.

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Sun, H., Zhi, Q., Wang, Y., Yao, Q. and Su, J., 2014. China’s solar photovoltaic industry
development: The status quo, problems and approaches. Applied Energy, 118, pp.221-230.
Vogel, H.L., 2014. Entertainment industry economics: A guide for financial analysis.
Cambridge University Press.
Wu, S.P.J., Straub, D.W. and Liang, T.P., 2015. How information technology governance
mechanisms and strategic alignment influence organizational performance: Insights from a
matched survey of business and IT managers. Mis Quarterly, 39(2), pp.497-518.