Impact Of IT On A Real-life Business: A Case Study Of XYZ Bank

Individual Assignment Requirements

You are to research a real life business example of your choice and the impact of IT on that business.

Important points

1) Does your chosen business need IT?
2) Why IT is important for business survival?
3) What is required to apply IT into your chosen business? (I.e. cost, planning, designing, equipment, installation, training, etc…)
4) How does your chosen business use IT? (internally such as employees, and externally such as customers, suppliers)
5) What benefits and advantages does IT bring to your chosen business? (I.e. revenue, flexibility, reduces cost, etc….)
6) What type of risks does IT bring to your chosen business? (i.e. security, privacy, confidentiality)
7) How can your chosen business maintain and monitor IT?

Your report will be assessed on the quality of your research and report presentation. Discussion must be relevant to your chosen business

Application of IT in the Bank

XYZ bank is a busy bank in Australia that has embraced high technology in its banking services operation. The bank employs IT in this major sectors; tellers PC networking, use of relational databases, E-mails, Equipment management software and more others. The use of IT in XYZ Company has greatly helped the bank to grow. It has enhanced delivery of services and products in a convenient and effective way (Kozak, 2005). It has brought in rapid and quick accessibility of critical information with quick decision making by the bank as well opened market to have various customers in a competitive market without failing. As well IT has equipped the bank with new problem solving technique in which the bank uses decision support systems to quickly make decisions (Mocetti, 2010).

Application of IT in XYZ bank affects three major categories of the key players in banking. It affects the customers, bank and employees (Casolaro, 2008). These are the key participants inside the banking environment. More so, comprises what affects XYZ bank.

The major issue for the bank to operate is to make profit just like other businesses. Therefore the first field to consider and to direct much attention and care is on customers’ side. On this, XYZ bank has researched and integrated new technologies to satisfy its customers. The bank has employed the following strategies to ensure that their customers are satisfied to the fullest:

1. Self-inquiry services:- the bank has implemented a software system linked to every customer account to perform self-service transactions which does not require much security and assistance. The services includes balance enquiry and query dropping. This self-service has authentication procedure to ensure every customer detail is secure.
2. Remote banking services:- the customers have been provided with online banking services where they can log in and perform various transactions while at a far distance from the bank branch.
3. Anytime banking services:- bank has installed ATM machines in different town locales to ensure that customers can access bank services at time of will.
4. Mobile banking:- the bank has devised and implemented application and bank SIM cards that can be used by customers in a 24/7 hours without moving because the service is at hand.
5. Online shopping: - customers can enjoy online goods and service purchase by use of smart cards and other means (Bofondi, 2005).
6. Due to this technology implementation and now the banking services are readily available at any place, customer’s time is saved without having to wait.

To the Bank

The main of the bank to implement the IT usage is gain market and in return earn more (Casolaro, 2007). The major reasons for the XYZ to employ IT are:

1. Due to various availability of inquiry services, implementation of IT helps the bank gather information that assists its development and growth through large market accessibility.
2. Implementation helps the bank obtain immediate response from its prospective customers without having the customers to access the bank for the feedback. This helps the managing board to make perfect decisions quickly and appropriately.
3. The implementation brings in a system software that helps the bank to generate various reports and indicate trends in return on investment.
4. The management of bank offices and branches can be centralized and be easily managed than earlier days of manual operations. The supervision and communication can be done over the network.

The major advantage that can be felt is how the customers has increased their delivery and as well increased their performance than when they used manual work performance. Employees’ productivity has been increased through the following:

1. Accuracy in computations and quick solutions while dealing with complex balancing tasks through computation. Employees can now do the complex task without much difficulties as the IT has implemented software that only need value inputs to give correct outputs. The time is saved and much more is achieved through this simplified technologies.
2. Printing of various receipts, statements and deposit slips has been automated enabling employees to take much time in customer needs. These makes the customer service to be perfect and good relation is maintained between the bank and customers.
3. No cases of errors in data entry such as duplicates. The systems has been implemented to ensure that every record is correct and validated.

As such, XYZ bank has ensured that it has moved rapidly to enjoy new customer services through use of IT to ensure that the customer is satisfied. Among all implementation, the following is a summary of IT technologies implementation by XYZ bank.

• Computers networking for teller services
• Use of sales tracking software system
• Use of distributed database system
• Use of E-mail services
• Equipment management system software
• Online banking
• Mobile banking
• Use of smart cards
• Use of electronic banking i.e. ATMs

Internet is been used as global superhighway for every business operation. The use word wide web (www) has made the word to be a global village where everyone can make transaction to a far continent while at home. Internet has played major role in banking by allowing the bank to perform online banking and as well access global market. Customers can opt to join global banks than their local banks. As well there are online banking services which assists the bank to transact its funds with a far customer for its benefit like PayPal and other electronic money transfer firms. XYZ has employed use of this services to ensure that its customers are served well and satisfied.

According to “ MIS Quarterly © 2004 Management Information Systems Research Centre, University of Minnesota”.

Purchasing IT infrastructure is expensive. As it is already known that the key factor and major key to survive is by ensuring that customer is satisfied and well served, the bank has to ensure that it purchases appropriate equipment. Buying of this tools cannot be done at once especially if the bank has to implement all earlier said IT technologies.

To the Customers

For instance, XYZ bank has already implemented online banking services. It has ensured that it has appropriate server hardware, networking hardware and the delivery system that is simple to use and easily obtained by the customers. Due to this achievement, the bank has invested largely to a point that it has felt the cost. Even though the bank has implemented electronic banking like ATMs, it cannot install this hardware systems in all towns. It has just installed some of them to the town cities and the major towns. The initial cost is always much and if not well managed can lead to bank closure. Installing ATM machines costs million dollars without considering the service personnel. In which the bank has to employ maintenance technicians who should be responsible for the ATM maintenance management and customer instructions.

The expenditure on information technology in XYZ bank increases by almost 2% in every year where the cause is due to system upgrades and ensuring security to the customers’ information. The current costs in Information technology system in a bank is billions of dollars. If the system are not maintained and serviced, the cost can be felt more than earlier initial cost. This can result in much data loss, much expense in trying to regain customers trust and as well can lead to bank termination by being bankrupt. Therefore IT systems are much expensive but are the best systems which offer the best solution to your problems. They should be maintained well and be secured from unauthorized individuals who might be having malicious intention. All system security vulnerability should be controlled and secured immediately when found.

Customer trust is based on service delivery. If the agreement service is bleached either by a hacker, this can lead to loss of customers. That’s why the bank should employ qualified IT staff to ensure everything is in order (Bofondi, 2005).

Use of IT in banking sector has opened chances for the hackers. In case of any security vulnerability of customers’ bank details, the hackers take advantage and intrude the bank account by withdrawing the funds. All the online accounts are at risk and what matters is how the service provider secures its resource facilities. There has been increasing cases of identity thieves, illegal account funds transfer and even cyber bullying which threatens customers (Moccetti, 2010). If hackers attack a bank, for instance XYZ bank and steals customers’ funds, there is possibility of customers losing trust with the bank and may fear investing with the bank (Casolaro, 2007). Therefore implementation of IT resources brings new employment opportunities for security measures although criminal hackers are becoming cleverer day by day than the organization who are researching on security measures.

Conclusion

For all the technologies implemented, IT has played a major role in enhancing market in banking and as well has make banks to operate globally. For instance there is an organization for master cards which links various banks through electronic banking. When one travels to a foreign country it is possible that that customer can use his smart card at another foreign bank fro they have been linked. I can greatly enjoy the IT services in the field of banking especially in XYZ bank which my bank as well. I can shop goods using a smart card and enjoy online services by paying through online. Although there exist possible security intrusion, the case is minimal since the banks ensures that the integrity, confidentiality and privacy of customer details is ensured at all cost.

I would online have one major recommendation to give the XYZ bank. I would recommend that the bank ensure the customer security is observed or ensured. If it is in terms of smart cards, the bank can use biometric authentication such as finger prints or facial detection at the ATM machines to ensure no cases of missing cards and withdrawal of funds being reported. Otherwise XYZ bank has ensured high systems security and every customer is served to his satisfaction.

References

Bofondi, M. and F. Lotti (2005), Innovation in the retail banking industry: the diffusion of credit scoring, Review of Industrial Organization, 28: 343-58.

Casolaro, L. and G. Gobbi (2007), Information technology and productivity changes in the banking industry, Economic Notes, 36: 43-76.

Information Technology and Organizational Performance: An Integrative Model of IT Business Value. MIS Quarterly © 2004 Management Information Systems Research Center, University of Minnesota.

IT in banking; Computer Industry Report, March 27, 1992; COPYRIGHT 1992 International Data Corporation; COPYRIGHT 2008 Gale,Cengage Learning

Kawu A H., The Impact of Information Technology on the Bank Performance (Nigeria in Perspectives) - Essays - Hassankawu.mht

Kozak, S. (2005) The role of information technology in the profit and cost efficiency improvements of the banking sector, Journal of Academy of Business and Economics.

Mocetti S. et al. (2010), Information technology and banking organization, TEMI