The past decade has witnessed an all-embracing convergence of computing, communications, information and knowledge which has shaped the way we think, work and live. The evolution of high-speed networks and the falling costs of computing power is making applications unimagined in the past, real possibilities in today’s modern society.
Images, files, video, data and voice can now be transferred around the world in the blink of an eye and this development of technology is changing the baking sector from paper and branches, to digitised and networked banking services. Advancements have already brought internet accounting and management systems of banks into a new age and now, it is changing how banks interact with their customers.
All over the world, banks are still struggling to find a solution to meet the expanding challenges in regards to the rapidly changing financial landscape. Whilst new IT technology is changing the face of the baking industry forever, finance providers who harness the ability to invest and integrate information technology will become dominant in the competitive global market.
The finance sector is aware that investing in IT is crucial and consequences on the finance industry in the near future is palpable.
As internet services and computers become more sophisticated, they have given banks and their customers high expectations, as well as sector employees benefiting from the new technology progression has brought. Furthermore, banking services and products are now delivered more effectively and conveniently due to advancements, which is creating new platforms for competition. Quick access to critical information and the ability to act rapidly will see the finance sector effectively harnessing technology and have the competitive advantage.
As previously mentioned, the advantages from technological development is multi-directional, to the customer, to the bank and to the employee.
Banks are aware of customer’s need for new services and different establishments are constantly making them available. IT has increased competition and forced banks to integrate technologies to satisfy their customers. Many finance industry leaders have developed and implemented the solutions below:
- Remote banking
- Electronic banking
- Self-inquiry facilities
- Anytime, anywhere banking
Again, during the last decade, banks applied IT to a wide range of back and front office tasks in addition to a multitude of new products. The key advantages for the bank to implement IT are:
- Fast and correct information transfer, allowing for decisions to be made more quickly and effectively by interconnecting computerised branches and controlling offices
- Generation of various MIS reports and periodical returns on due dates
- Automatic and time sensitive reporting and instructions
- Immediate replies to customer queries
- Availability of a multitude of inquiry facilities, assisting the bank in business development and follow-up
IT has increased the productivity of employees via the following avenues:
- Accurate computing of burdensome and laborious jobs such as balancing and interest calculations on due dates
- Signature retrieval facility, assisting in verification of transactions and sitting at their own terminal
- Automatic printing of schedules, deposit receipts etc. and thus freeing staff from time-consuming jobs and enabling them to give more attention to customers
- Avoidance of duplicate entries due to the use of single-point data entry
Future of finance
Due to banks having to keep up with the constantly changing and conflicting needs of customers, they are facing a challenge. It is suggested the future lies with financial service providers, as opposed to traditional banks and the majority of large banks are starting to create value networks. Doing so presents challenges, and banks will have to first develop a comprehensive distribution system, that will enable customers to interact with them at multiple points. Furthermore, banks will have to implement performance measurement systems to assure the mix of products and services they offer are beneficial to both the customer and the bank, and in-line with current technology.
However, technology will not solve all financial sector issues or being the only creator of advantages. Any technology harnessed needs to be integrated in an organisation, with the change management issues linked to people resisting new concepts and ideas. Furthermore, any implementation needs to backbone a clearly defined and well communicated business strategy.
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