Information Technology in Financial Services: Inroduction

BANKING DIPLOMA EXAMINATION

Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB)

Information Technology in Financial Services-DAIBB

Lecture No. 1: Introduction

A.  Definition of data :

            Data are the streams of raw facts representing events occurring in organization or the physical environment before they have been organized and arranged into a form that people can efficiently understand and use it.

B.  Definition of information :

          Information means that data have been shaped into a form that is meaningful and useful to human beings.

C.  Definition of Information system :

            An information system can be defined technically as a set of interrelated components that collect ( or retrieve ), process, store  and distribute information to support decision making and control in an organization.

            Supporting decision - making, coordination and control, information systems may also help manager and workers to analysis problems visualize complex subjects and create product.

D.  Dimension of information system :

            Different type of organization use different type of information system according to the nature and requirements of the organization. To use the information system in the organization, they have to understand the organization, management and information technology dimensions of the systems and their power to provide solutions to challenges and problems in the business environment.  

1.  Organization :

            Information systems are an internal part of organizations. Indeed, for some companies, such as credit reporting firms, without an information system, they would not be able to operate their business. The key elements of an organization are its people, structure, business process,, politics and culture.

            Organizations have a structure that is composed of different levels and specialties. Their structures reveal a clear - cut division of labour. Authority and responsibility in a business firm is organized as a hierarchy, or a pyramid structure of rising authority and responsibility. The upper levels of the hierarchy consist of managerial, professional and technical employees, whereas the lower levels consist of operational personnel.         

(a)  Senior management :

            Senior management makes long - range strategic decisions about product and services as well as ensures financial performance of the firm.

(b)  Middle management :

            Middle management carries out the program and plans of senior management.

(c)  Operational management :

            Operational management is responsible for monitoring daily activities of the business.

(d)  Knowledge workers :

            Knowledge workers, such as engineers, scientists, architects or some expertise persons are design products or services and create new knowledge for the firm. 

2.  Management :

            Management’s job is to make sense out of the many situations faced by organizations, make decisions and formulate action plan to solve the problems. Managers perceive business challenges in the environment; they set the organizational strategy for responding to those challenges and they allocate the human and financial resources to coordinate the work and achieve success. A substantial part of management responsibility is creative work driven by new knowledge and information. Information technology can play a powerful role in helping the managers to design and deliver new products and services and redirecting and redesigning their organizations.    

3.  Technology :

            Information technology is one of many tools, which are used by the managers to cope with changes. 

(a)  Computer hardware :

            Computer hardware is the physical equipment used for input, processing and output activities in an organization system. It consists of the following : computer of various sizes and shapes; various input, output and storage devices and telecommunication devices that link computers together.  

(b)  Computer software :

            Computer software consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. 

(c)  Data management technology :

            Data management technology consists of the software governing the organizational data on physical storage media. 

(d)  Networking and telecommunications technology :

            Networking and telecommunications technology consisting both physical devices and software, links the various pieces of hardware and transfers data from physical location to another. Computer and communication equipment can be connected in networks for sharing voice, data, images, sound and video.     

(e)  Internet :

            The world’s largest and most widely used network is the Internet. The Internet is a global network of networks that used universal standards to connect millions of different networks with host computers around the world.

            The Internet has created a new ‘universal’ technology platform on which to build new products, services, strategies and business models. This same technology platform has used internally, providing connectivity to link different systems and networks within the firm.        

(f)  World Wide Web ( www ) :

            The World Wide Web is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting and displaying information in a page format on the Internet. Web pages contain text, graphics, animations, sound and video are linked to other web pages.    

E.  Perspectives of information systems :

            Information technology ( IT ) consists of all the hardware and software that a firm needs to use in order to achieve business objectives. This includes computers, printers, hardware, software and handheld personal digital assistants. For example, we can say that Microsoftware office desktop productivity suite and many thousands of computer programs that can be found in a typical large firm. Information systems are more complex and can be best understood by looking at them from both technology and a business perspective.     

F.  Strategic business objectives of information system :

            There is a growing interdependence between a firm’s ability to use information system and its ability to implement corporate strategies and achieve corporate goals. Increasing market share, becoming high quality or low cost producer, developing new products and increasing employee productivity depend on more and more on the kinds and quality of information system in the organization. The strategic business objectives of information system are discuss below : 

1.  Operational excellence :

            Business organization continuously seeks to improve the efficiency of their operations in order to achieve higher profitability. Information systems and technologies are sometime consider as the most important tools available to the managers for achieving higher levels of efficiency and productivity in business operations, especially when coupled with changes in business practices and management behaviour.     

2.  New products, services and business models :

3.  Customer and supplier intimacy :

4.  Improved decision - making :

5.  Competitive advantage :

6.  Survival :