Banks are key components in financial systems and economies that provide specialized financial services in a manner that allocate funds from savers to borrowers and facilitates in fulfilling all functions of money and its circulation in economies.
The development and growth in information technology has prompted banks and financial institutions to leverage digitalization and simplification of banking technology to transform the banking and financial services and has led to development of countries.
It is information technology innovations coupled with information communication technology that has enabled banks in meeting high expectations of the customers who are more demanding and are also more techno savvy compared to their counterparts of the yester years, they demand instant, anytime and anywhere banking facilities and bank products for their daily operations and growth.
Information Technology is influencing competition and the degree of contestability in banking is prospering very fast. Due to the development of technology, bank’s superiority in information has deteriorated and clients are provided with quality and differentiated products. Entry barrier have been declining, new competitors have emerged. Some financial products and services have become more transparent and products, customer show willing to unbundle the demand for financial products and services, all these lead to a more competitive market environment and efficient in banking industry.
In practice information technology is providing solutions to banks to take care of their accounting and back office requirements. This has given way to large scale usage in many services aimed at the customers of the banks. Information technology also facilitates the introduction of new delivery channels in the form of Automated Automatic teller machines ATMs, internet banking, push and pull, swift money transfers, internet of things and mobile banking.
Further with information technology revolution, banks are increasingly interconnecting their computer systems not only across branches in towns and cities but also to other geographic locations with high speed network infrastructure, setting up local area and wide area networks and connecting them to the Internet. As a result, information systems and networks are now exposed to a growing number and efficiency in the banking industry.
There have been unprecedented better changes and transformations in the banking industry mostly due to new invention in information communication technology that has generated efficiency. With IT, operation management, customer management, recovery management, sales management and analysis of markets has been simplified to suit the ever increasing financial needs.
Banks and financial institutions will continue to experiment with new financial innovations and technological innovations, Electronic and information based services. Particularly with the invention of high speed internet, there is a great potential for growth and continued experimenting different technological invention in the banking industry.
New banking intermediaries offering entirely new types of banking services have emerged as a result of innovative e-business models and technological developments. The internet has emerged as a result of the innovative e- business models and is providing efficiency.
Though information technology has instigated efficiency in money and banking systems there has also developed hinges and risks that need resolutions. At first it used to be difficult to steal money and data from banks, but now with the help of sophisticated technology this can be done within the shortest time possible because cyber criminal are ever developing systems to access banks’ information.
As every innovation has some drawbacks, banks should therefore be prepared for worse scenarios, as it has been experienced that many computers and sometime systems go down bringing the entire office world to an untimely end. For this reason it is management’s responsibility to keep abreast with the new systems and precautions for compensations.
The problem of Cyber ransom is one of the fastest growing security concerns affecting financial institutions, corporations, government agencies and private entities alike. The potential harm of these attacks can be devastating, putting essential operational data behind a pay wall until the hacker gets their ransom. Much of this significance is attributable to the security landscape at large; hackers are constantly developing new ways of getting into systems.
As information technology develops, innovations availed and new inventions are put into use, measures on how institutions and customers must protect their information should be developed and availed at every strategic position within the reach of customers all times. Systems and software must constantly be updated and upgraded so that strength is built to prevent unauthorized access to data and information. This will prevent scammers, fraudsters and cyber criminals from entering and accessing the institutions systems and client’s devices.
Cybercrime laws that include laws related to computer crime, internet crime, information crimes, communications crimes and technology crimes formulation. While the internet and the digital economy represent a significant opportunity in banking, it is also an enabler for criminal activity; Cybercrime laws are laws that create the offences and penalties for cybercrimes and criminals.