Finance in Information Technology
Buy custom Finance in Information Technology essay
Information technology is the design, study, application, development, implementation and management of computer-related information systems. Information technology is used to store, send, receive, manipulate and retrieve data. In business, information technology is used to automate processes, link the business to customers and avail information necessary for the decision-making. Many businesses have information technology (IT) specialists who not only choose the appropriate hardware and software products for a firm but who also ensure that these products help to achieve organizational goals and increase customer satisfaction (Pousttchi and Schurig).
My possible career choice is banking. Information technology is used extensively in the banking industry. Information technology in this sector is critical in the modern times because of people’s lifestyle. People want convenient, affordable and available bank solutions where they will have easy access to information. Information technology in banks is used to link banks to customers, provide them with information and tools, so that the service of money handling is efficient. Branches are usually connected through networks to the banks’ data centers. These are where mainframe and servers are. ATMs are similarly connected to the data center. Frequent introduction of new software in the banking industry is the order of the day because of the dynamism of the user/customer’s needs. Call centers are established in large banks in order to receive customer queries. Some ethical issues regarding information technology in the banking industry include allowing non-employees access files and information regarding a client, hacking online databases, using spyware to monitor activities, and availing information regarding a client to third parties.
People travel more today than it was in some years ago. They also use credit cards more often. Credit cards and ATM cards are convenient and safer. With ATMs, customers need to access money anywhere at any time. They can withdraw money if their bank offers centralized online real-time investment (core banking). This means that all the branches are connected to the central servers. Customers can, therefore, withdraw money from any branch. There are threats associated with SMS banking. It is not seen as an entirely sage banking channel, because it uses insecure encryption which may be vulnerable to manipulation. Information technology innovations are increasing. This is because customers have so much exposure to information and many need to personalize every service offered.
In banking, professionals need to be innovative, since people are increasingly paying through the bank, even for smaller services. There are issues of concern pertaining information technology in banking. For example, SMS banking, a common mode of banking, is prone to security problems. As pointed out earlier, SMSs are not encrypted. This facility requires introduction of compensating controls. In addition, use of SMS banking should be limited and should be allowed up to a level where it offers more advantages over use of Automated Teller Machines (ATM), internet banking and over the counter payment method. SMS banking allows the bank personnel access information such as notification about credits and debits to the account, large withdrawals from the account, availability of funds for transaction purposes and authentication. It also allows customers enquire about balances, request mini statements, transfer money, find out about exchange rates, stop payment processes and request fixed interest rates.
Examples of these responsibilities for a bank’s IT personnel include: designing of web pages, installing networks, developing multimedia resources, installing communication components, oversight of communication messages, managing and planning technology lifecycle among others. The IT personnel are also important in designing, management information systems and decision support systems. Management information systems include the above tasks, while decision support systems involves using data to plan, control processes, so as to achieve organizational objectives such as viability of investment, the interest rate and lending requirements among others systems.
There are many information technologies one should familiarize himself/herself with if he or she seeks to draw a career in the banking industry. One of these is TRAC. It is a risk management tool. It automates policy creation and helps banks comply with regulations and laws enforced by the industry’s regulators. It simplifies complex processes in small banks. TRAC helps in compliance of Bank Secrecy Act in generating appropriate policy and in tracking recommendations on how to improve the risk management processes. It has modules that select and manage third party vendors (Barnes and Corbitt).
Each TRAC module has its own purpose and produces specific outputs. The need to hire an IT specialist is therefore avoided. The IT module facilitates risk assessment to be done on the IT assets of a bank. Ranking of assets based on their protection profile is one of the objectives of using this module. Controls are identified to reduce risks; these are also ranked by probability and impact. The information security module enables users to undertake a risk assessment and rank all bank processes. It facilitates policy formulation and customization of policy statements which are then made available online. There are other modules such as third party management, audit, banking secrecy and action tracking modules.
Knowledge of SPSS is significant in the banking profession. This program is used to analyze data and draw inference statistics and reports. The calculations and findings are significant in the decision-making process, forecasting and planning. The conclusions made can be used to form a basis of performance analysis. This can help stakeholders such as shareholders, regulators, insurers and customers to determine the financial position of the business. The banking sector is making less profit today compared to yester years. Firms are merging while downsizing and other internal cost cutting methods are continuously on the rise.
One of the crucial qualities of an efficient banker is the ability to undertake data mining. This is about discovering patterns from a large amount of data. Information technology will continue to play a significant role in the banking industry. It is one of the several sectors in the economy where large amounts of data are continuously processed and where security and trust are important.
There are increased security procedures being established. One-time passwords are a tool that helps avoid cyber fraud. These passwords are requested by customers when they want to transact online or use mobile banking interface. The passwords are a development of the memorized passwords. They expire once they are used or when their lifecycle finishes.
There are many other technologies that will impact heavily on the banking sector in the next five years. They include complex technologies that will be created to help detecting fraud while also helping bankers and IT professionals to notice interesting patterns in the industry. IT professionals in the banking industry have a difficult task of ensuring that all bank branches are interconnected. Real time information regarding interest rates and rates of exchange is important in the banking profession. Bankers need to develop intelligent information systems so that they are aware of any happenings in other banks, in the central banks and in capital markets regulators among other industry players. Bankers with knowledge in economics and statistics employ econometric models to determine how some factors affect others, the degree of variability and causation. One of the most commonly used statistical software for this purpose is the Stata.
Information technology is the design, study, application, development, implementation and management of computer-related information systems. There are many information technologies an individual should familiarize himself/herself with if he or she seeks to draw a career in the banking industry. Bankers need to establish complex but secure systems that respond to consumer needs and help them plan, send, receive, store and manipulate information.
Buy custom Finance in Information Technology essay