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Information Technology in HSBC

Information technology has made the system very easy for business people. IT has become the core mechanism for every business and more especially it is must be needed in the banking sector. HSBC is utilizing its IT resources for providing the best customer services to their customer by providing digitalized services like online banking facilities, Internet banking facilities, Mobile banking facilities in which customers can avail banking services from home.

Information Technology in HSBC

Information Technology in HSBC

The main purpose of this study is to identify the usefulness of IT in which HSBC is getting benefitted by using IT resources. With the support of IT, HSBC is able to provide the financial services intensively and those financial services are investment banking, commercial as well as retail banking with some significant financial products and banking services. There are some ethical issue and social issues are related to which bank has to keep maintain the privacy of data, keep customer data secret and confidential, and do not share banking data.  LAN, MAN, and WAN is widely used as key network technologies. Cyber-attack could be a threat to a bank but the bank should use all the latest security systems to protect the bank services and keep the trust of the customer as a bank is a reliable source for giving security of customer’s money.  So, it can be concluded that the role of IT in the banking sector is highly appreciated.

The use of Information Technology in every organization is a prime criterion just because of its importance in every aspect. Information Technology has become a common need for running a business. The banking industry, IT industry, Retail Industry, Telecommunication Industry are highly dependent on Information Technology (Power, D. J. 2002). The best part of Information technology is that it can provide a smooth service to the client by which the organization is able to provide a hassle-free service. Mostly, the success of an organization is largely dependent on the best of Information Technology and its resources. From other aspects, there are some ethical issues that prevailed while using Information Technology because it has a negative impact on business also just because of the unethical practice with IT resources.

Objectives of this Report

The main objectives of this study are to analyze the importance of information technology by which the banking business like HSBC is getting benefitted with the use of information technology to provide better services to the clients and the threat from which situation they are facing problem to run this business (Power, D. J. 2002). Along with this, the aspect of social issues and ethical issues are related in the sector of Information technology for HSBC. This study will also cover the use of internet services and intranet services in HSBC so that the business operations of HSBC can be conducted in an effective and efficient way.

Background of HSBC with Information Technology

HSBC is a renowned financial and banking services organization in this global context. The headquarter of HSBC is in London and it has the largest international networks in 82 states with 10, 000 offices and also operating the business in the territory of Europe, Asia-Pacific Region, Africa, United States of America, and the Middle East. With the support of IT, HSBC is able to provide financial services intensively and those financial services are investment banking, commercial as well as retail banking with some significant financial products and banking services (Bynum, T. W. 2008). HSBC has the business philosophy of maintaining global network communications and IT support to provide banking services with extensive financial products to satisfy its clients.

Literature Review

Information Technology and its role in Banking Sector

The use of IT by the banking sector has made customer service faster and easier. Now banking sector activities and business operations are totally digitalized and all the banks are operating banking services online that is called online banking. Technology has changed the full services and operations of the business by creating an effective accounting information system and management information system of all banks. Internet banking and mobile banking is the most acclaimed services of a bank for providing banking service at home (Xiang, et al. 2015). The client is fully able to maintain and operate his banking transaction from home and take all relevant banking transaction information from home by using the service of E-banking or internet banking and also mobile banking. Though the use of those technologies is expensive, still it has great advantages for the bank and also for clients (Bynum, T. W. 2008).

Types of networking technologies in the Banking Sector

LAN and WAN are the prime networking technologies in the banking sector. When it is required to connect more than one computer and required to share printers, scanners then LAN is more applicable. The characteristics of Topology, Protocol, and Media are capable of transmitting data that ensures better network development within the banking operation to connect so many computers.

Ethics and Social Issues of using technology in the Banking Sector

The banking sector is mostly dependent on IT. So, the use of IT in the Banking sector should be ethical by the means of keeping the client information secret, banking transaction secret as those are mostly confidential issues and those things are not sharable with others. If it is shared with others, then it will be unethical, then people will lose their confidence from banks. According to, it is the core responsibility of a bank to deal with banking information, banking transaction, customer information, credit policy, and others confidentially (Xiang, et al. 2015).   The main issue to protect the data of the customer, data of the baking transaction, and also the data of employees, otherwise, the bank will be lost its goodwill just because of leaking the business information. In that case, the use of IT in the banking sector should be followed strictly with standard rules and regulations.

In addition to this, social issues are linked up with IT whereas Cyberbullying or cyberattack by hackers is a threat for banks to secure the customer’s money. According to Xiang, et al. 2015, the use of the internet should be used with strong security, and all the data in the server should be password protected with strong password mode. In that case, a cyber attack in the banking sector has become a social issue whereas social insecurity is increasing.

The importance of Intranet and Internet in business in Banking Sector

The use of Intranet for the banking sector is required to maintain internal communication within the bank and the whole brand of that particular bank. Intranet helps the employees to communicate with other employs smoothly when it is a matter of sending or receive any official data or other reports. It makes the internal communication system easy. On the other hand, the Internet is the most important aspect for the banking sector because in recent times online baking and internet banking are the most lucrative service for banking businesses in which without the internet it will not be possible to serve online banking or the internet banking benefits. According to ((Obeidat, et al. 2015) internet is utilized or used by the bank to provide the best modern services to their clients smoothly and at the same time internet helps to achieve success in banking operations.

Analysis and Discussion

Role of Information Technology in HSBC

Information technology has made the service of HSBC easy and customer friendly. The best role if IT for HSBC that it opens the door of E-banking for their clients whereas the customer can do balance inquiry to know the bank’s available balance of his or her accounts, know the transaction summary from home just using internet banking, SMS banking or mobile banking options.  Customers can request for checkbooks, fund transfer options anytime at 24 hours a day, 7days a week. Customers can avail of the service of ATM for fund withdrawal under these E-banking facilities. Customer is able to do On-line purchase of goods and services by online payment systems.

In addition, HSBC can provide better service quality with the help of IT. IT can ensure efficient service delivery (Obeidat, et al. 2015). The technology used in HSBC to provide financial services globally is totally customer-oriented and it works as a powerful tool for providing quality customer service. Customers can know about whole services and products of HSBC just visiting the website of HSBC and avail full banking financial services by entering into internet banking options. Moreover, IT has reduced the service delivery cost by introducing the automation process in transaction whereas a customer can avail self-service channels for his or her account maintenance.

Types of Networking Technologies used in HSBC

HSBC use three types of networking technologies in their regular activities based on the need and requirements of the organization. They are:

  • Local Area Network (LAN): LAN is a very small and single-site network for any organization. It connects network devices within a relatively short distance. It is a system to interconnect computers and the geographical area s within a building to 1 km. All the terminals are connected to the main computer (Obeidat, et al. 2015). The main computer is known as a SERVER. LAN’s cables are used to connect the computers and these cables are owned, controlled, and managed by a single person or organization. They also use specific connectivity technologies specially designed for banks, Ethernet, and Token Ring.
  • WIDE AREA NETWORK (WAN): A WAN is used for a larger networking setup. It is the combination of many LAN network connections. It is like the internet spans in most of the world connected with a ROUTER. These kinds of networks can be built by using telephone lines, satellite links, and other long-range communication technologies
  • Metropolitan Area Network (MAN): It is a data network designed for a city or an area. It connects an area greater than LAN such as a city, region, etc. it has some high-performance hardware and all of them can be used by sharing hardware and software resources (LaMee, James A. 2002). Cable TV is an example of a metropolitan area network. MAN network connects all the computers using coaxial cables or fiber optic cables.

Ethics and social issues in HSBC

Some ethical and social issues faced by the banks based on different use of information technology are described as follows. With some excellent advantages, information technology is adding some demerits of its use too.

  • Security: It is easy for hackers to hack into any computer or system on the internet. Hackers can easily use an IP address to access a computer and collect data for misusing the information. They can also use internet cookies to collect information and increase the high risk for IT users of fraud. In the case of online banking, the transfer of money can be damaged the process by a hacker and all the money will be lost for their selfish interest (LaMee, James A. 2002).
  • Privacy Issues: Information technology can easily exploit our freedom of privacy. It can be done by internet webcams, online stalkers, and the use of social networks. Some of the people and organizations can use data to expose users with wrong intentions and some can also spy on their employees from social networks.
  • Copyright Infringement: IT users can easily gain access and share data with friends. To download anything for free it is saving user’s money, but it harms the original creator of these works and they are not getting credibility and payment for their hard work (Robert, 2013).

The importance of Intranet and Internet in HSBC

Intranet and internet both are very important for banks in their regular workflow. Without the proper use of it, banks like HSBC cannot run their works properly. Here the importance of intranet and internet are given:

Importance of Intranet

The intranet helps to prepare documents and ensure policy management of the HSBC bank. It helps the staff aware of bank policies and follows the correct procedure. HSBC Intranet Software includes comprehensive document, procedure, and policy management to make the use of the intranet easier internally (Robert, 2013). To provide bank customers with the great benefit of Online Forms and Automated Workflows intranet are also used. An intranet is very essential to maintain communication with employees and also keep a proper track record of employees’ works and activities. It helps to communicate and doing internal works, meetings, and other decision-making processes easier through an intranet.

Importance of the Internet

HSBC banks widely use the internet to provide the best online banking service to their customers. They provide them with different banking services offers, debit cards, credit card and use their information to maximize their benefit level given by the banks (Gordon Reeve, 1985).

The bank also tries to target and merge with different retail shops and restaurants to provide their clients with ease in shopping and offer discounts and other exciting benefits. Through the use of the internet, HSBC banks can also secure and save their sensitive and crucial information and improve their safety and security process for better service.

List and explain the different stage of the system development life cycle

The system development life cycle is the combination of multiple steps to set up a complete system in an organization. The steps of system developments are:

  • Analysis: Firstly need to analyze the existing system and evaluated and identify all the problems it has. Then interviewing the users of the system and consulting with support personnel can be helpful for system development (Gordon Reeve, 1985).
  • Plan and requirements: For the new system requirements all the deficiencies need to be addressed with specific proposals for improvement. Then the banks IT needs to work on its features, functions, and capabilities.
  • Design: After designing the proposed system and preparing all the plans into physical construction, hardware, operating systems, programming, communications, and security issues need to be dealt with properly.
  • Development: Finally the system needs to be developed. Then need to use all the new components and programs to complete the proper installation.
  • Testing: Then check the performance and if necessary perform some adjustments at this stage. Tests will include systems integration and system testing process for better management (Uppal, 2010).
  • Deployment: The system is aligned with the production environment. The new system can be phased in based on the application or location so the old system will get replaced eventually. It will become more cost-effective to shut down the old system by implementing the new system properly.
  • Maintenance: Finally, changing and updating the system and its Hardware or software is important. They need to get upgraded, replaced, or changed to better fit the needs of the users.

Conclusions

To be successful information technology is a must for an organization. In the banking sector information technology helps to manage better communication with customers and employees. With the help of information technology, banks can advertise service and improve the overall organizational structure to increase benefits out of the system (Uppal, 2010).

References

  1. Power, D. J. (2002), ‘Decision support systems: concepts and resources for managers’.2nd edition, Quorum Books
  2. Bynum, T. W. (2008), ‘Norbert Wiener and the Rise of Information Ethics’, Information Technology and Moral Philosophy, Cambridge University Press
  3. Obeidat, M., North, M., Richardson, R., and Rattanak, V., 2015. Business intelligence technology, applications, and trends.
  4. Xiang, Z., Magnini, V.P., and Fesenmaier, D.R., 2015. Information technology and consumer behavior in travel and tourism: Insights from travel planning using the internet. Journal of Retailing and Consumer Services22, pp.244-249.
  5. Robert, R. (2013), ‘Marketing information systems’, Encyclopedia of the information system, Vol.3, No. 1
  6. LaMee, James A. (2002), ‘Intranets and special libraries: Making the most of in house communications’, University of South Carolina
  7. Uppal, R.K. (2010). Banking and information technology. New Delhi, India: Anmol Publications.
  8. Gordon Reeve, F. (1985). The banks and their use of information technology. Electronics and Power, 31(1), p.53.

Written by

Md. Shadequr Rahaman

Email: [email protected]

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