ICT Rise in Banking

The financial sector continues to be the same because the results of rapid growth and development of ICT happen to be noted in the market in general and much more particularly around the banking industry. Modern banking dates back to 1826, there is an financial crisis that triggered banks to not meet thier obligations. Hence using cheques for drawing money and settling accounts grew to become a lot more common.

A History of Banks Revolutionary Changes Created by ICT Development Information Communication Technology, more generally known to as ICT, may be the automation of processes, controls, and knowledge production using computer systems, telecommunications, software and ancillary equipment like the atm(ATM) and an atm card. It’s a term that generally covers the utilizing of electronic technology for that information needs of the business whatsoever levels. ICT has been utilized like a tool to facilitate customer services, bank business structures and business methods. Research has also proven that the introduction of ICT within the banking sector continues to be marked by the development of numerous items and services. The ICT items being used within the banking industry, which have developed over recent occasions and which my paper shall mainly concentrate on include amongst others.

a) The Atm

b) Wise Cards and

c) Telephone Banking.

These developments have enabled banks to supply easier, secure and varied services. The use of information and communication technology concepts, techniques, guidelines and implementation methods to banking services has turned into a subject of fundamental importance and concerns to any or all banks and even a prerequisite for local and global competitiveness5. This really is based on research made by a Nigerian scholar, Akinlolu Agboola. He further claims that ICT directly affects how managers decide, the way they plan and just what items and services can be found within the banking industry.

This case is similar to our local situation within Kenya since today we have seen that the majority of the banks go hi-tech. This is because evidenced within the common networking by different banks and also the rampant utilization of today’s technology within the administration of services for their particular clients. Today, it’s possible to access most services provided by the financial institution in the ATM or utilizing their phone. Via a computer, bank clients are now able to discover even private information concerning their accounts. As well as the user anticipation around the specific developments:

The Automated Teller Machine

Atm cards is really a card released with a bank, bank or building society you can use in an ATM for deposits, distributions, username and passwords, and other kinds of transactions, frequently through interbank systems. ATM cards are often used in a branch, as identification for private transactions. This really is for example whenever a person wants to create a withdrawal or perhaps a deposit in the ATM. In Kenya, they’re also utilized in different shopping points when one wants to buy or to cover a particular service. Atm cards will be distinguished from debit cards since unlike the bank card, in-store purchases or refunds with atm cards can generally be produced personally only. This really is because of the truth that they might require authentication via a personal identification number or PIN. Quite simply, ATM cards cannot be applied out shops or stores that just accept charge cards.

However, other kinds of transactions through telephone or internet banking might be carried out with atm cards without in-person authentication. Including balance queries, functions of an atm card and ATM cards are combined one card known as debit cards or also generally known as a charge card. This really is for example the situation in Canada.

Wise cards

A wise card is an additional growth of this ICT development era. Physically, it resembles a charge card in shape and size, but inside it’s totally different. Within a wise card usually consists of an embedded microprocessor. The microprocessor is within gold contact pad on one for reds from the card. Wise cards have been in existence within their modern form not less than ten years only. It’s also called a charge card, client card, key card or cash card are prrr-rrrglable, and therefore does apply to various reasons. Within their use within the banking industry, it has been established that wise cards enhance the convenience and security associated with a transaction. They offer tamper-proof storage of user and account identity. Wise card systems also have shown to be more reliable than other machine-readable cards.

Around the world within the nations where wise cards have generally been used, bank controlled co-operations (Visa, MasterCard, Uncover, and American Express) have folded out countless wise cards underneath the EMV (Euro pay, MasterCard, VISA) standard11. Wise cards have been shown to secure transactions with regularity. By extension, the elevated security results in elevated trust. It has consequently brought to enhanced customer support. An additional advantage of using wise cards is the fact that cost is reduced. It is because transactions that would need a bank employee’s some time and documents could be handled digitally through the customer having a wise card.

For example, it allows customers their phone to verify that the check or deposit has removed obtain latest balance, transfer money between separate accounts in the same bank, and acquire particulars about services. Telephone Banking is promoting alongside Online banking. This is known to as internet banking and it is something that allows someone to transfer money between their accounts in the same bank and examine username and passwords, deposits in addition to financial loans, anytime utilizing a computer. Getting checked out the positive dimension around the contribution of the introduction of ICT within the banking industry, we can not ignore the truth that additionally, it has its own switch side. It’s therefore imperative to indicate some the defects which have include the rapid development.

Negative Impact of ICT rise in the Banking industry

Numerous things usually might have to go wrong, despite each one of these technological developments within the banking sector. We view Cheques intended for another person get deposited in someone else’s account or the other way around as well as dividend warrants go down the wrong path because of exactly what the banks term as “technological errors”. In many cases, account balances around the ATM terminal are wrong, either because they’ve been understated or overstated or this is often a huge inconvenience for that customer. However, what’s now emerging to become a bigger issue is the problem of fraud which has include the ICT developments


In Kenya, Credit and ATM consumers lose lots of money every single day for their close relations and individuals entrusted for everyone them in places like banks in the event of fraud. Towards the top of their list of individuals carrying out the crimes are cardholder’s partners, children, buddies, co-workers, relatives and clerks in banks and shopping malls. They exploit the trust consumers have inside them to have their card information. After they obtain the PIN, they steal the credit card and employ it to withdraw money in the ATM or go purchasing prior to the cardholder finds out. In by doing this, it’s possible to finish up losing lots of money and property. Such persons should really be billed with stealing unlike the provisions from the Penal code14 and also the Banking Act15 and the steps needed come to curb these affilictions. Choice follows much once we celebrate the positive strides taken through the banking industry because of the growth of ICT, the should be keen to strike an account balance in order to ensure their customers’ security and interests aren’t jeopardized through the same.

Copyright (c) 2012 Morgan D