Use of ICT in Banking

Every organization, industry and government uses the technology to convert its inputs into outputs. Successful strategic planning is based on efficient use of information and technology techniques by executives and decision makers. The use of information and communication technology is heavily used by the banking system in Australia.

Commonwealth Bank of Australia provides personal banking solutions, institutional banking, home loans and several more banking facilities. It provides integrated financial services in the banking industry in Australia. It applies information and communication technology, concepts, techniques and policies in its day to day operational activities. ICT directly affects the decision making, planning and procedure by the managers in the banking industry. According to Laudon and Laudon, the managers cannot avoid the importance of ICT application as the entire cashflow of fortune 500 companies was found out to be linked with efficient Information System (Laudon and Laudon, 2004).

The use of ICT in banking industry involves “automation of processes, controls and information production using computers, telecommunications, softwares and ancillary equipments such as automated teller machine and debit cards” (Alawode and Kaka, 2011). Communication is the transference of the information through a certain medium from one point to another.

Commonwealth Bank of Australia uses credit-scoring techniques to consumer credit, mortgage or debit cards. The use of ICT increased the process efficiency and reduced costs in banks. Data storage and retrieval has also been utilized by the bank to reduce data redundancy. SMS alerts, internal network, authentication processes, internet access, automated payment system and digitalization of formerly paper based correspondences are the main components of ICT used by the Commonwealth Bank of Australia.

The security measures of ICT are used by the Commonwealth Bank of Australia as banking industry is highly dependent on the trust from its customers. To reduce the risk of hackers, technological failures, privacy of customer’s information, opportunities of fraud and denial of service attacks have to be managed properly. Hence, by using tight security systems of ICT, the Commonwealth Bank of Australia is attracting the customers who previously were not inclined to use e-banking.

According to Woherem, the banks should use the automated payment and delivery system and also apply ICT to their operations in order to survive in this dynamic competitive market of new millennium. In order to properly place itself in the new dynamism of information and communication technology, the banks are needed to re-examine their services and delivery systems (Woherem, 2000). Commonwealth Bank of Australia uses SMS alert, which is another remarkable innovation of ICT, through the use of smart phone. Automated SMS alert is mostly combined with the use of e-banking and internet facility. Automated Teller Machines and Electronic Funds Transfer is widely used in the world by the Banks for allowing the customers to withdraw their money at any time anywhere in the world. This innovation of ICT has made a major breakthrough in the financial industry and has seen increase in ATM usage from 28% to 87% in the last three years.

This analysis of use of ICT by the Commonwealth Bank of Australia shows how adapting ICT has influenced the content and quality of banking services. Investment in the information and communication technology should become an important strategy of to achieve effective performance of banking operations.

 

References:

Alawode, A. J., & Kaka, E. U. (2011). Information and Communication Technology (ICT) and Banking Industry. Mediterranean Journal of Social Sciences, 71.

Laudon, K. C., & Laudon, J. (2004). Management information systems: managing the digital firm. New Jersey, 8.

Woherem, E. E. (2000). Information technology in the Nigerian banking industry. Spectrum Books Ltd.