Information Communication Technology (ICT) is a major part of the new era of banking. It allows banks to reach out to a new type of customer and allows customers to use the business on line. But how has ICT affected the way banks operate as a business? In this report I will try to investigate how information technology has affected the way banks operate. I can do this by separating the report into four sections. They are: 1. What is E-Commerce and what affect it has had on banking 2. What are the recent developments in IT? 3. How are the recent developments in IT used in banking? 4. What is the potential use of IT in the future? At the end of this assignment I hope to be able to understand how IT affects banking in the present and how it will affect it in the future.

What is E-Commerce and what affect has it had on banking Electronic Commerce is when business’ start trading over the internet so they can reach out to a different type of customer and also allow their existing customers the chance to use their company without leaving the comfort of your own home. This can be seen from retail outlets such as Tesco’s or Sainsbury’s, which gives their customers the chance to order the food they want from the supermarket and a member of staff will bring the goods that you want directly to your home. However E-Commerce has a special part to play when banks start to use the Internet for their own benefits.

In this day and age more and more companies are trying to make a customers life easier and technology has helped in a major way. When concerning banking, customers are now able to use ATM’S, telephone banking and personal transactions. This enables the customer to cut out the middlemen and do what you want with the money at a quicker rate. However E-commerce just takes it that little step further. If you have the Internet on a computer, television or mobile phone then you will be able to deal with E-banking. This process allows you to see your account, make transactions to and from your bank account and make standing orders from the comfort of your own home. This again allows you to cut out the middleman and this process is so much quicker than if you went to the bank yourself. This type of technology is not a new idea but banks feel that it is time to take advantage of the amount of people who have the Internet and appeal to a different type of customer. Using E-commerce seemed the right way to go for most banks.

There are many advantages for banks using E-Commerce. Firstly if banks get connected to the Internet, they will become an instant multinational. This is because the Internet can be accessed all over the world so people in countries such as Japan to South Africa will be able to be kept informed on how the business is doing and how joining the bank will have a positive affect on their life. The second advantage is having a web site gives access to customers. This means that customers are now able access the information they need from the comfort of their own home instead of going to the bank and asking employees information. You can also see your account with just a click of a button so therefore makes the customers happy. You don’t necessarily need capital investment to set up a web site. In most cases it is free to set up so all you have to do is make sure the web site is eye-catching and appeals to the customers. Trading costs will also decrease because you will have fewer employees. This is because in a normal bank you will have many employees such as cashiers, personal bankers and security guards that you will have

What are the recent developments involved in IT and how is it used in banking New technology is being introduced everyday to make sure that banking is being made easier for its employees and of course its customers. Here is some of the technology: Video Conferencing This technology is used so that people can see and hear whom they are talking to. This is already used on the National Health Service (NHS) and is called Telemedicine. This is when for instance a patient and doctor are both present at different terminals such as the doctor is in America and the patient lives in Britain. They will be able to see each other and both understand what is wrong with the patient. Also telemedicine are being installed on some ambulances so if a patient needs surgery right then in the ambulance, a doctor will have these pictures transmitted and he can figure out what he should do. In terms of banking a customer will be able to talk to an employee over video conferencing without even leaving the home. A customer can talk interactively to an employee about gaining a loan for instance, which will make a customers life a lot easier.

Accessing the company network form home This is a major step in the right direction for banking. This will allow their employees to access all the necessary data they need about the company. As a result there are some advantages. Firstly, a company can save money on the workspace they provide for their employees. This is because employees can now work from home and transmit any work they have done through the network. Also you can work longer hours because you are in the comfort of your own home and you will have everything you want around you. However this can work the other way because you won’t have anybody breathing down your neck watching how much work you do so might not be motivated.

Mobile Computing This is when again you can access the information you need without going into work or staying at home and working on your PC. Instead you can use a laptop or notebook computers, which are not connected to ant plugs. These are designed for people on the go such as accountants and managers. You are able to access any information you want any time, which is very appealing to someone who hasn’t got a lot of times on his or her hands.