Write 5 pages thesis on the topic it’s role in banking. This has however changed during the last three decades, as there have been new insights into the role and importance of information technology in commerce, brought about by the fast developments in technology. With the passing of time, people have realized the significance of information technology in business strategies. An example is in the banking industry, where information technology has determined various opportunities in the business, mainly through electronic banking.
Banks today have been adopting the latest technologies, in order to survive and maintain growth in the market. This is mainly because information technology is viewed as a resource that is very enabling when it comes to developing new and more flexible systems that help banks react swiftly to changes in the market. According to Burn and Martinsons, “widespread investments in information technology (IT) by the banking industry have raised productivity and contributed to improved customer services” (267). Traditionally, financial services in the banking industry had been extremely fragmented. The scope and ability of banks’ business activities were limited by the need for customers to be available physically to perform transactions that were mainly paper-based and government regulations.
In order to increase banks’ ability to conduct their business at a wider scope and sometimes in the physical absence of the customer, deregulation was performed, and business technologies embraced in order to widen the market for financial products and services. This has led to the banking industry becoming very competitive at an international level. Burn and Martinsons point out that “in particular, the bargaining power of buyers, like corporate treasures and retail customers has increased” (269). The productivity of customers and employees has also been bolstered, and banks operating costs have been reduced significantly.
Through the application of information technology, banks have been able to develop sophisticated products and hence provide better services. Examples of these products include ATMs (Automated Teller Machines), while services provided include E-banking (electronic banking), internet banking, telephone banking, and home banking (“Role of Information Technology” mbaknol.com).