Information Technology in Banking and Financial Institutions

Essay by jbw203University, Bachelor's April 2007

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Management of Information Technology

Banks and financial institutions are relying increasingly on information technology to support growth and expansion into the global marketplace. The major technologies which are used nowadays include Internet banking, mobile banking, telephone banking, smart cards, credit cards, and automated teller machines (ATM's). These methods allow customers to carry out many routine transactions without going into a branch. However, with all of the benefits that technology brings to the banking industry, it also brings increased risks and threats. Many banks are faced with a growing concern over the impact of dissatisfied employees, unauthorized users, industrial spies and hackers exploiting and compromising their information systems and networks. As technology becomes more sophisticated, so do those who would like to enter the world of information, such as these professional hackers. That is why banks should not only invest in providing new I.T. based services but they should also invest in a good security system to protect themselves and their customers against viruses, spyware, keystroke loggers and eavesdropping programs.

Information technology does not always mean fewer costs for banks to operate, but it has become a necessity in today's competitive market. This showed very clearly when visiting both the leading bank branches in Malta. They seem to be competing by offering new I.T. bank services. For example Bank of Valletta started using mobile banking while HSBC are launching this service in March 2005. Mobile and wireless technology enable banks to satisfy clients who demand real-time information and mobile payment accessibility for example buying top-up cards for your mobile. To access mobile banking you will need a WAP-enabled mobile phone. Through a mobile phone, an individual can access his or her account information, effect transfers to third parties, request banking services as well as other information and pay bills. There may...