The Impact of Information Technology on the UK Financial Sector :: Business and Management Studies

The Impact of Information Technology on the UK Financial SectorI have study that in business, development technology can be used ifeffective in a strategic way in order to gain a competitive advantageand this can be seen in the UK financial services. In such an industryit can be said to be one of the closely dynamic and rapidly growingsectors of the economy. Such a rate of change and growth has created aprolific environment for the innovation of entropy technology. Theapplication of information technology has had a qualitative impact bychanging the mode of operation in the financial sector, modifying therange of services provided and linking together geographically isolated financial hubs into a global financial community in order totrade 24 hours a day.For the past two decades organisations have noted that informationtechnology is beta for profitability on both the cost and revenueside. In the financial services sector costs arise from two unspecificareas of operation those co nnected with the management ofinformation, and those with the execution of transactions. Financialservices have always been a labour-intensive industry. The rising costof labour, relative to the cost of former(a) factors of production, hasimposed a burden of rising costs as a proportion of total revenueearned in such organisations as sell banks. The function of IT hasbeen one very important way in which financial services firms havesought to contain their costs. For example, in commercial banking theapplication of attendant generations of computerisation since theearly 1960s has dramatically reduced the size of back-officestaffing, while the growth of expensive paper-based systems for moneytransmission (cheque and credit clearing systems) has been curtailedby the development of paperless computerised fee systems such asBACS (Bankers Automated Clearing System) in the UK and the developmentof EFTPoS (Electronic Funds Transfer at Point of Sale) systems.The role of information techno logy has grown and changed infinitelyin the banking sector. The banking industry has used IT to enableincreases in the volume of transactions as well as the development ofnew products applications have ranged from back-office (check andaccounts) processing, mortgage and lend application processing, andthe electronic funds transfer to more strategic innovations such asautomated teller machines and new kinds of securities. The use of IThas also had some important customer - supplier effects. For thecustomers of service providers, it has been used to improve thequality and variety of services in many industries, especially throughits ability to amass, analyse, and control whacking quantities ofspecialised data. Such improvements include error reduction orincreased precision, faster or more convenient service, and improved