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Technology and Banking Industry - Essay Example

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Technology and Banking Industry

Some of the technologies provide ease and convenience to the customers and others help the banks to reduce their overheads and thus save money which was usually spent on physical infrastructure. Technology is also allowing small banks to compete with big established banks as they rely more on their virtual infrastructure than on their physical infrastructure to compete. IT has provided many custom made and off the shelf solutions to take care of their accounting and back office needs. IT has also helped in the development of new channels of reaching out to the customer such as auto teller machines, net banking, mobile banking and various other facilities. Some examples of technology products which are used by banks to provide service to its customers are net banking , credit card online , mobile banking , electronic money transfer , online payment of taxes , mobile recharges , airline ticket booking etc. The list of services being provided by banks to its online customers is endless.
Bank of America Corporation as a financial services company is the largest bank holding company in USA by assets and second largest by market capitalization. (Federal Financial Institutions Examination Council, 2009).It was founded in 1874 and was initially known as Nations bank .Its current name was assumed after the acquisition of a San-Francisco bank named as Bank of America. The need of information technology in Bank of America was felt due to another revolution that it has pioneered. It was one of the first banks to deploy branch offices of the parent bank in many locations all across the nation. But cashing a cheuque in a different location was a cumbersome process for the customers as well as for the bank employees as there was no way of identifying the customer. Initially this identification was done using signatures of the customers which had to be verified by the parent bank. The system worked for Bank of America and also gave it the competitive advantage but the amount of back office work that had to be done by the bank increased tremendously. Its employees were working night and day to update the ledgers and verifying the signatures of the customers who had requested withdrawal of money using cheques.The process was cumbersome and time consuming. By 1950, Bank of America decided it was no longer feasible to keep hiring more and more employees in order to do its back office work. It decided to take the help of computers for the back office work - at the time when the use of computers was limited to military. The first computers to be used by Bank of America were called as EMRA. The design, testing and the implementation of EMRA computers took nearly a decade. They were finally installed in to service in different locations in California in 1959.Each machine was able to process about 33000 accounts per hour .A single machine was ...Show more

Summary

Information technology has impacted each and every business in the modern times. Financial institutions rely a lot on gathering, analyzing and providing information to meet the needs of the customer. It is claimed that money is just incidental. Banking industry is basically an industry which deals with the exchange of information between people…
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Technology and Banking Industry essay example
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