Information Technology and Financial Services - Essay Example

IT & Financial Services Contents Introduction 3 Scope and nature of the online banking services 4 Financial Services 4 Traditional and contemporary retail banking and financial services 5 The money transmission services 5 What is e-banking? 5 The impact of e-banking 6 Strategic Risk 6 Business Risk 6 Credit Risk 6 Reputational Risk 7 Conclusion 7 References 9 Introduction To use the online banking services every individuals should have their own personal computer and internet connection. Their personal computer becomes their banker who will suggest them in their banking trades. The e-banking services that the customers can get are as follows: Attaining information about the accounts and loans Conducting transfers of different accounts between the external banking. Buying and selling of stocks and bonds by ant depot. These services providing by the banks are changing and being improved because of the competition between the online banks. EFT transaction needs a method to know the card and the card holder. It is manually verified the card holder signature. The other information may include in the transaction requires the card holders signature that has to be send online for the validation by the card issuer. Some other information that is included in the transaction is not visible to the card holders. There are some various ways of e-banking that includes: (Gurusamy, 2009, pp 48-50). Telephone banking Online banking Short message services banking Mobile banking Interactive-TV marketing Independent of location and time that execute your payments and stock market which the other banks are eager to use this channel for delivering their services because of relatively lower cost and higher sales and potential that can offer greater convenience for the customers. But the medium offers much more benefits. Numerous organisations from within and outside the financial sector are currently having the e-banking facilities which is a wireless services used by the customers (Carroll, Webb, and Griffith, 2001, pp.101-103). Scope and nature of the online banking services Financial self-services cannot be viewed in isolation. It operates within the wider area of financial services and impacts on the traditional model. Example, many issues that relate to non-IT financial services that have existed for many years are still relevant today. Customers have preferences for visiting local bank branches and insurance company offices. This is because people have no other option when making a physical deposit of money or cheques into their account. The term Information Technology refers to the combined package of computers, telecommunications and information resources. It relates to both the hardware and the software that instructs the hardware what to do. The financial sector includes banks, insurance companies, finance houses, investment trusts, and stock exchanges and so on. Organisations comprising the financial sector are collectively referred to as financial institutions of financial intermediaries. Financial intermediation is necessary because of mismatch of borrower needs and investor requirements. Investors will lend for various reasons and only under certain conditions, risk, time and amount being among the variable factors (Davey, 2009 pp.58-62). Financial Services For meeting the various needs of investors and borrowers the institutions are offering a wide range of products and services. Investors may open current accounts, high-interest cheque accounts and so on. The collection of cheque payments are also definite characteristics of banking. The cheques are still largely used for business payments, a range of money transmission of products and services have been used for the purpose. The announcement was made with the understanding of a suitable replacement mechanism would be in a place and will allow the uses of cheques that are to be discounted without the effect that is existing the payments of the cheques will continue for the customers as long as they can serve them. Apart from the characteristics the bank offers a number of ancillary services that can be safeguards and for the night service facility of the insurance and assurances. The shares dealing with the services and advice to the travel and foreign exchange services, the finance house are the banking group and provide some traditional banking services but they are tend to specialise the hire purchase that they are providing to the customers(Alexei 2002, pp.99-102). Traditional and contemporary retail banking and financial services Retail banking and financial services are concerned with provision of savings, investment, borrowing, lending etc by different financial institutions. Earlier these services were provided from person to person with the help of branch network. Banks can meet more financial needs of the customers compared to insurance companies. Banks are the most important factor in developing and implementing information technology. The financial services are delivered through branch network with the help of the head office. In recent years the branch banking is considered to be the prime delivery channel. However information technology is increasing and it is being used by retail customers to access and manage their account from a distance. There have been also some new forms of delivery such as branches that are likely to have through the wall or it can also adopt it physically to incorporate with the self-service machines. The postal and the telegraph services have also conducted with the some of the financial institution for the potential customers; it is usually based on a profile for the existing financial services. The strategy is typically for making products and services more profitable and sophisticated modelling is now more predictable in nature. These products include much clearer vision to the customers that they are offering. The banking environment in today’s world is the customers who opt for a single delivery channel but it can also use wherever it is convenient for the time. It would not be use for the customers for the regular pay bills over the branch counter, for goods and services by the credit card facility (Sarkar, 2003, pp.55-60). The money transmission services The financial institutions are particularly are the banks, offer individuals and businesses with the opportunity that effect the transmission of the money in many following ways: They are cash, cheques, standing orders, direct debits, debit credits, online, telephone etc. What is e-banking? It is the very basic form that e-banking mean the provision of the information about a bank and its services. More over the e-banking services are provided to the customer access for the accounts that are liable to move their money between different accounts. To make understand the electronic distribution is of goods and services. In the e-banking the electronic delivery of means are the customer that are conducting the electronic channel. Many banks are very much eager to understand the other organisations and deliver their services because their service is at a very low cost. The impact of e-banking The e-banking is one of the most important banking for the people who do not get the time for visiting the banks for any purpose. It is very useful in future to practices the e-banking and the implications are not clear. The view that the internet is showing to every people in the environment will sweep away the old holds that the banks have. There is little risk in the e-banking facility as well they can be classified as well: Strategic Risk The financial institution and the banks should understand the risk that are associated with the e-banking facility and should evaluate it from the risk management cost. The poor e-banking facility is planning for the investment decision that is to be increase in a certain time. Business Risk Business risks are also very much significant the e-banking facility of newness is much to about it. They have some well different characteristics from the traditional banking customers. This result in high rejection rates or may use for pricing the risk (Ritchie and Marshall, 1993, pp.110-115). Credit Risk The credit risk is not increased by any loan that is not originated by any e-banking channel, the management is considered to be additional precautions when it is originated and the loan is being approved by the electronic assuring information systems that are affecting the portfolio through the e-banking services. The aspects of on-line loans are originated and approved to make the trend of risk management for the process of lending more challenges. If it is not properly managed than these are aspects are significantly increasing the credit risk of e-banking. The customers o verify the identity for the online application for executing the enforceable contract of monitoring the growth and the price that are underwriting the standards, and the credit policy of the quality of loans that are being provided in the e-banking facility. It also helps in collecting the loans from the individuals with wider range of geographic area. The related funds of this risk are the liquidity, interest rate, price/ market risks and are funding the investment that is related to the risk that are increased with individuals and are depended on the volatility of the price. The internet of this service is provided with a very high ability in the market. It is based on the services that are effectively matched with yield-focused investors in the market (Kondabagil, 2007, pp.45-47). Reputational Risk This basically used in the banks with the internet facility of the market. The internet allows the rapid growth for which the information is meant with any incidents, these can be good or bad in knowledge within which the speed of the internet is considerably to cut the optional response for both the banks of the services that are being provided with the on-line services. The security that they are providing falls in the category under which the serious criminal are intent to be commercial sensitive or any financial services that are casual for the system that are being designed for lending up the security of the users who are using the e-banking facility of the financial institutions. It is very important to know the channels of the e-channels that are being doing automatically by the organisational issues that have also dealt with the some of the examples that are being reported in the e-banking facility. They are much more aware of the frequency of the unsuccessful attempts that are being provided in the finding of the break of system that are inputting the data in the e-banking system of the organisation. The most sensitive system is used for high value of payments that are being needed in the market of the e-banking facility of the company (Davey, 2009, pp.55-58). Conclusion This paper basically analyses the e-banking facilities used in daily life. It also commensurate about the financial institutions that are providing the online banking facility and the customers are very much friendly to use it. To get a clear idea about the strategy that has been driven in the e-banking facility from the top and takes the effects of the e-banking together. The performance of e-banking id very much useful for the service people who can operate it from anywhere in the world, the e-banking is very useful in the financial sectors as well. The strategic is the best way of providing safety to the customers and the security facility as well. The networks have been developed from the information that is being delivered to the customers. The strategic and the proactive approach helps to take the information in building best practices among the updated and the market develops of the based security management that has been adopted from the e-banking facility. The e-banking facility consists of some risk that can be the credit risk, reputational risk and so on. The credit risk provide some of the risk that are being faced by the customers on purchasing the products in credit or the pin which has been entered was not provided with some security. The reputational risk is the risk that are based on the risk of the reputation that falls into the category of three that can be casual hackers, denial of services, and fraud that can be caused by the e-banking services. This could be implied in the following ways to generate the high value payments in the confidential information that are being provided with the secured ways in the banks to make a less risky than to occur and generate in the greater way of prospects. The e-banking provides a very high risk as it also provide a very friendlier way of operating the facility and to reduce the time constraints. References Alexei.K. 2002. Liberalization of Trade in Financial Services and Financial Sector Stability, Geneva: International Monetary Fund. Carroll, T., Webb, M. and Griffith, M. 2001. The Risk Factor: How to make risk management work for you in strategic planning and enterprise, Harrogate: TTL. Davey, J. 3 May, 2009. Supermarkets Rush into Banking. London: The Sunday Times. Gurusamy, S. 2009. Financial Services. New Delhi: Tata McGraw-Hill Education. Kondabagil, J. 2007. Risk Management in Electronic Banking: Concepts and Best Practices. London: John Wiley & Sons. Office for National Statistics, 2012. Internet Access - Households and Individuals. Great Britain. Payments Council. 2011. Payments Council to keep cheques and cancels 2018 Reuters. 2011. Orange, Barclaycard launch mobile payments in UK. [online]. Available from: http://uk.reuters.com/article/2011/05/20/uk-orange-barclays-paymentsidUKTRE74184620110520. [Accessed on 29th April, 2014]. Ritchie, B. and Marshall, D. 1993. Business Risk Management. 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