Multimedia Information Systems at Barclays Bank - Assignment Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxxx Title : Multimedia Information systems at Barclays Bank Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2010 Table of Contents Table of Contents 2 Multimedia Information systems at Barclays Bank 3 Organizational structure 3 Strategic role of information systems 4 Multimedia Information systems at Barclays Bank 4 Specific social, ethical and legal issues 10 IT infrastructure and emerging technologies 12 Internet banking 13 Electronic payments 13 Security investments 14 Information systems security 14 Another example of IT security breach in Barclays is the fraud in online banking. This is a problem that occurs in regular occasions due to hackers. The bank has created a guarantee for online banking and refunds money to any fraud victim to the last penny. Another major IT security breach occurred when robbers stole £300,000 French cash point using the firm’s cards.. This robbery was conducted by Slovakians living in London. The gang withdrew hundreds of thousands of Euros before the police could notice and catch up with them. These security breaches have been major draw backs to the bank’s IT department (Thakor, 2000). 15 Recommendations 15 Conclusion 16 Bibliography 18 Multimedia Information systems at Barclays Bank Introduction Barclays bank is a British financial service provide operating all over the world. It is an investment firm listed on the London stock market and NYSE. It is a component of FTSE 100 Index. The bank was ranked as the 25th biggest firm in the world by the Forbes Global 2000 in the 2008 listing. It has also named as the largest financial service provider with assets worth $3.7 trillion. It is the second largest financial institution in United Kingdom and in the Globe as far as assets is concerned. Its headquarters are in Docklands at One Churchill rest in Canary Wharf, after changing place from Lombard Avenue (Barclays Bank, 2010). Organizational structure Barclays is lead by Marcus Agius as the chairman who took from Matthew Barrett as the chairman. John Varley is the Bank’s Chief Executive and reports directly to the chairman. John is responsible for all the strategic operations and development of all its operations. The operating units of the Bank are categorized into two classes: Corporate, Investment Banking and Investment Management (IB&IM) and Global Retail Banking (GRCB). IB&IM handles three main operating units: Barclays Capital, Barclays Corporate and Barclays Wealth. GRCB handles several operating units. Chiefly it has the duty for UK Retail Banking (UKRB), Barclaycard and Global Retail Banking (Barclays Bank, 2010). Strategic role of information systems The 1990s have brought and are still bringing significant evolutionary developments in many firs and the technical environments of the firms. The changes in IT are to be sought in advances in swiftness and quality of hardware and software, the emergent of influential and transparent networks, the accessibility of disseminated databases and the arrival of multimedia IS and multimedia services. One class of strategic information systems that is multimedia information systems can be a facilitating technology for Business Process Redesign, Business Process Reengineering (BPR) and Business Reconfiguration (Stiroh, 2000). Multimedia Information systems at Barclays Bank The commitment of Barclays Bank in IT can be assessed by taking into account the entire investment. The bank has invested billions of dollars in IT. The bank is increasing its investment in IT every year with the investments having major effects in the local as well as international banking of the firm. The IT department is headed by the Multimedia department head who is under the director of alliances at Barclays because strategic chances of widening the business structure and to spruce up the bank. The leader of Multimedia at Barclays has devised multimedia objectives to assist the firm excel in the field. Barclays Bank Multimedia Department has set the main objectives of the department as assessing multimedia systems through pilot programs, rising electronic catalogues for traders and Barclays group and establishing a requirement for a generic Multimedia application structure for retailers. Other objectives include creating software setting for Multimedia Information schemes for retailers, establishing and testing online loan services and establishing and evaluating Internet plastic card dealings (Kozak & Kowalski, 2005). Goals of Multimedia systems at Barclays The main objectives of the multimedia system at Barclays include: Evaluating Multimedia Information framework via piloting Creating electronic catalogues for retailers and the entire Barclays bank group. Establishing a requirement for a broad Multimedia application structure for traders. Creating a software surroundings for Multimedia Information systems for traders Creating and testing online plastic card operations Barclays’ utilization of multimedia IS signifies an expanding need in the delivery pattern. The probable target market operated through a digital delivery guide is a large market although multimedia Information systems will be applied to customize the financial services. Thus multimedia services in Barclays are highly customized but offered via a mass delivery channel like interconnected TV or multimedia kiosks. The difficult task for the firm is to find for a balance between customized IS and mass IS as far as the design matters are concerned. The obligation to a customized product is understood by acknowledging that multimedia services are not similar since they are modified to suit each customers needs and the type of service required. The figure below shows the redesigning organizational boundaries with multimedia in Barclays bank group. The changing procedure of a store-based buying to a shoples buying model is being executed using multimedia information systems. Financial services can be transferred to the work place, to the home and to community access ATM multimedia kiosks essentially through similar technology and software (Berger & Mester, 2001). Redesigning organizational boundaries with multimedia in Barclays bank group Barclays creates multimedia IS for both internal application and external application. Internal multimedia IS includes systems like job creating which is a Point of Information (POI) system. It consists of a database of appropriate job description and career chances to which customers can interactively access their own expertise (Kozak & Kowalski, 2005). Multimedia training IS are applied in Barclays sixty-three “Learning Centers’. External systems are aimed at a large market although the goods and services are being tailored through multimedia mechanisms. External systems are the local projects, the Business Needs Analyzer and Touch bank. An analysis of the interior and exterior multimedia IS established by Barclays is summarized by the figure below; Homestead Projects -Freemans electronic catalogue -Page & Moytravel external -Barclays financial services Business Needs Analyzer Touch bank Career builder internal Training Barclays Bank multimedia information system Barclays is at the present at the phase of utilizing multimedia information schemes in its operations. Multimedia IS plays a significant function in organizational redesign. Economic and technological factors push firms to establish systems jointly and further expose them to competitors and rivals. The new challenge is to enhance IT to capitalize on the main competencies of the firm and establish new information and facts or new material or information. Multimedia IS plays a facilitating function at Barclays in the procedures of redesigning and rethinking major competencies and expertise. The most significant multimedia IS in application in Barclays exploitation is interactive TV. Interactive TV will replace CD-I schemes and spruce up Barclays business transactions. The delivery of customized multimedia services to a large audience through CD-I, interactive TV or any other technology is considered to be essential. The delivery channel should be transformed from a branch communications to a direct customer line into the home, public joints and the workplace. The other main multimedia expertise involved is the combination of Desktop-Videoconferencing abilities into kiosks and other uses. They offer a direct link from the information point to sales point to the staff members of the bank. Multimedia IS and specifically networked multimedia IS can be regarded as a facilitating technology to transform Barclays into a situation of a networked firm. The firm is faced with the challenge of enhancing the need to control distribution complexity. Through strategic coalitions Barclays is redesigning its operations to enlarge the scope and establish new services and targeting clients in different ways. The challenge of networked multimedia IS and the creation of new technology is closely associated with other partners than Barclays. Thus, Barclays is in close discussion with major multimedia firms such as BT, AT and T, mercury and other IT suppliers (Berger & Mester, 2001). An internal program is seeking for probable alliances and joint ventures. In order to offer real global or European services, Barclays depends greatly on control condition since telecommunications and the related network communications (information highway) is still controlled. Benefits of multimedia services at Barclays are summarized by the table below: customer Enhanced service delivery Enables effective requirement analysis Impartial advice Convenience Facilitates financial modeling staff Assist in sales Reliefs the sales staff to focus on selling Training Branch office transactions Frauds can be detected through video and audio technologies professionalism operations branch infrastructure 24 hour accessibility Interactive sales terminals(IST) Recruiting new clients in public places Online networked services/information Multimedia enhances their impact on social and organization life due to transformations to the digital customer links in workplace, home and public areas as shown by the figure below: Storage workplace home network content Public access Digital customer links in workplace, home and public areas In order to manage with the varying character of work and labor force it calls for the application of multimedia IS in the operations of the Bank. Though it is an evolutionary expansion of IS and the support technology, firms that invest in multimedia systems will tend to have a competitive advantage over others. Firms are required to think fundamentally about how multimedia IS will influence their operations. In regard to the major competencies, it is worth noting that more than 30,000 workers at Barclays have been trained on the media operations at the sixty-three Learning centers. Specific social, ethical and legal issues The invasion of privacy is one of the major issues related with the use of multimedia systems in financial institutions. It is illegal for workers to install software programs that control employee computer use. Since information systems can hold large amounts of data it is necessary to decide the nature of information to store and the type of information which is improper to store. Some of the ethical issues involved in information as far as IT is concerned include: Accuracy, property, Access and privacy. Accuracy describes the provision of the true information in the Information and Technology systems. Misinformation or giving false information can lead to loses to the parties involved. It can also lead to creation of errors that can be costly to rectify. The reputation of the institution is also affected by giving false information. This illustrates the logical property rights of information. There are significant economic and ethical aspects enclosing the rights, concerns related to the special attributes of the information and the manner in which it is transferred. Any particular component of information can be very difficult to generate. Once generated, the information has deceptive quality of being easy to reproduce and to transmit to others. This property makes information difficult to protect since it is communicable and a challenge to maintain all by oneself. Accessibility is also ethical issue linked to information in the IT infrastructure systems. Information is transmitted through literacy. Each innovation in information transformation and handling has brought about new needs on achieving literacy. Privacy is important in handling information in the IT sector in order t determine the people who are allowed access to some information, under what circumstances and the type of information to keep to oneself. IT infrastructure and emerging technologies The general IT infrastructures in the modern multimedia systems consist of six major constituents. The constituents illustrate the investments that must be integrated in a firm in order to benefit from the multimedia system. Vendors competing for the supply of the components provide to their clients a combination of incompatible reliable solutions (Thakor, 2000). With time vendor firms have been compelled by large firms to corporate in the provision of the IT infrastructure systems in order to provide quality and reliable IT constituents. For example a hardware and service provider vendor like IBM cooperates withal the major firms in the software sector and has strategic relationships with other firms such as accounting firms and plans to work with any firm in the industry in order to provide quality services. The IT infrastructure ecosystem is summarized by the figure below: At Barclays, the Multimedia is organized in the following sections. The organizational structure of the Service Business Division (SBD) Barclays Global Services (BGS) which is responsible for providing information and transaction support services and commodities Barclays Network Services (BNS) which offers the group’s network and communication framework. Barclays Computer Operations (BCO) which is the main computer service provider. There are a few IT related services which can also be viewed as emerging technology that can be used or enhanced in future to improve the service delivery of Barclays bank. These services are: Internet banking Most banks particularly in the US allow their clients to operate through the Internet. These transactions including checking the balances and transferring money to loan applications. Although the bank allows its clients to carry out some activities through the Internet, these activities can be increased especially in this era of growth in Information and technology. Improvement in these types of transactions can even lead to establishment of internet-only institutions. Electronic payments Some of the emerging types of electronic payments include smart cards and software related products. Although some like smart cards have been introduced in the bank, introduction of various electronic methods in the bank would not only lead to efficiency of the bank, but also increase profits due to cost savings on banking operations. Banks intending to serve a large number of client bases are resulting to electronic payments methods to increase efficiency as well as profits. Security investments Barclays bank can also consider investing more on securities. Progress in IT has enabled some banks to invest in sophisticated investment methods including derivative securities. The most common types of derivative securities currently in market include: options, futures, swaps and structured note. The bank can consider investing in these to increase its returns and diversify its products. Information systems security Information is one of the financial institution’s most valuable assets. Protection of information assets is essential to create and uphold trust between the financial firm and its clients, adhere to the set laws and safeguard the reputation of the firm. Barclays Bank has been very careful particularly in the protection since it is clear that a leak of information to unauthorized people particularly the competitors or malicious hackers can be very devastating to both the bank as well as its customers. Some examples of IT security breaches that have occurred in the bank in the recent past include the security breach in internet banking service in 2000 which led to the closure of the Bank’s online transaction. The security breach which happened in an early morning led to users accessing the accounts of other customers (First et al, 2000). The bank was compelled to close its online transaction and install a new security infrastructure system. Its internet banking system was cited as the cause of the Bank’s closure to more than 171 branches at the beginning of that year but the security breach led to distrust of the bank by most of its customers. This security breach clearly illustrated the reason as to why most people had doubts on online trading leading to a poor growth in e-business. The bank claimed that less than ten customers were affected due to more than two customers logging in at the same time. The problem was however rectified. Another example of IT security breach in Barclays is the fraud in online banking. This is a problem that occurs in regular occasions due to hackers. The bank has created a guarantee for online banking and refunds money to any fraud victim to the last penny. Another major IT security breach occurred when robbers stole £300,000 French cash point using the firm’s cards.. This robbery was conducted by Slovakians living in London. The gang withdrew hundreds of thousands of Euros before the police could notice and catch up with them. These security breaches have been major draw backs to the bank’s IT department (Thakor, 2000). Recommendations Progress in Information and telecommunication skills facilitates the invention of new services and products in all the sectors including the banking sector. The major classifications of the new services and products are Internet banking, electronic payments, investment securities and information exchanges. Barclays bank should increase its investments in the IT related products and goods in order to enhance both its efficiency as well as its returns. New offers offer considerable amount of returns for financial institutions and convenience for their clients. Although they require more investments and create higher running costs, the returns from the same outweigh the expenses. By comparing the figures of correlation coefficient between IT improvements and efficiency of Banks, it can be shown that technology plays a considerable role in the presentation of the banks and is also positively correlated with profit margins of the Banks. This implies that Barclays should be more committed to investing in the IT in order to minimize operating costs and raise their revenue. Although IT growth has had positive effects in both profit and cost efficiency in most banks, there is ability to enhance additional profits and minimize non-interest costs. This conclusion implies that if severe technological applications are implemented in Barclays bank then it would generate more profits via taking advantages of wider range of services and reduction of operation expenses (Thakor, 2000). Conclusion Investing in IT has been one of the wisest decisions that Barclay bank group did. The bank has been able to minimize its operational costs. Growth in IT positively affects the operations of banking institutions in our different ways. One way is that it allows the institutions to launch new depository services like call centers, ATMs and Internet banking which open more opportunities to realize the benefits of economies of scale and suppress the effects of diseconomies of scale that exist. In a similar manner some IT-related products like securitization and derivatives are more effectively offered by large banks which signify their dominance in the industry. Technological progress leads to innovations in creation of new banking services that bring about economies of scale while minimizing the effects of economies of scale. Advances in IT enable large banks to dominate virtually all investments and control risks more efficiently compared to the small banks. Advancement in IT has also led to a reduction in managerial diseconomies of scale. Growth in IT enhances the control and monitoring of large banks including the Barclays Bank more effectively compared to smaller ones (Demoing et al, 2000). New technology enables the mangers or the administrators of large banks to observe and monitor all the operations of the bank including the activities of each of their employees. This minimizes the occurrence of emergency situations and also reduces the number of supervisors required for the operations of the bank. Investing in IT has thus been a significant growth step in Barclays bank. Bibliography Barclays bank. Personnel banking. Retrieved on 22nd May, 2010 from Berger, A. N., & Mester, L. J., 1997, "Inside the Black Box: What Explains Differences in the Efficiencies of Financial Institutions?” Journal of Banking and Finance, Vol. 21, 1997, 895-947. DeYoung, R., Hunter, W. C., & Udell G. F., 2002, "Whither the community bank? relationship finance in the information age", Chicago Fed Letter, No. 178, Furst, K., Lang, W. W., & Nicole, D. E., "Who Offers Internet Banking", Quarterly Journal, Vol. 19 (2), 2000, 29-48. Kozak, S. J. & Kowalski, K. 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