The Role of Information Technology in Financial Services


Today Octostrategy’s team tried to find out how the role of information technology in financial services has changed networks for the exchange of information in the global financial system.

First, let's jump into a small history excurse.


In the 1960s, the New York Stock Exchange shortened its trading days because the volume of trades was too high to process manually. The development of information technologies such as computers and local networks in the 1970s brought fast and affordable information access to the finance industry. Increasingly affordable computers encouraged the development of numerous small financial firms that handled electronic data processing. At the same time, the speed and reliability of information technology supported the creation of nationwide financial services, including electronic check and credit card processing. 


Online commercial transactions began in 1995, and by 1998 the Internet was processing more than $50 billion worth of transactions. 


So, what is happening nowadays?


Information technology plays a huge role in financial services for many different reasons, but most importantly on the electronic networks that exchange information.


When you look at financial services currently, they are all molded based on creating a faster, more efficient service for customers which focuses on more mobile-based quicker options. Since cloud-based technology information is so often used, the importance of information technology is incredibly vital.


When looking at information technology you must look at the entire global financial systems in place which allow this type of technology to thrive and function at an entire global level. 


The role of information technology in finance allows financial institutions to constantly attain new info at the same rate as their competition. The impact of information technology on financial services also allows customers to be able to easily complete online transactions, which creates a better convince in finance, allowing for the development of information technology and initially creating a faster and more efficient service. 


Financial reporting is also an industry within information technology that has greatly impacted the financial service industry. The growing modernizations that are surrounded by information technology have greatly enhanced the way we use financial reports.


What is the key role of IT technology?


Technology has overall driven a persistent ultimatum for accessibility, and innovation, and being able to have convenience is going to be something that keeps changing forever. The role of information technology in finance departments plays a big part ranging from small to large applications and operations. 


Communication is a very critical component that comes with information technology as well, and there are a ton of advantages that lie within the streamlining of communication in both perspectives.


Creating more automating and commoditizing processes intensifies the power of information technology in our society today as well, and when looking at how robo-advisors are used. This is a prime example of how IT has taken over how we look at automation in wealth management services such as asset allocation and investment opportunities. 


The importance of computers in finance also improves data storage, file management, and data reporting as stated earlier in this article. Cloud-based services such as Dropbox are huge roles in information technology, but these services play tangent roles in data reporting and analysis.


How does all this affect society?


Online banking and transactions, and mobile payments are incredibly popular in our society today. There are a ton of vulnerabilities since financial transactions are being used so much, and many financial institutions have to adapt to the latest security, and updated technology in order to stay up to date. Even though there are a lot of risks that are associated with the use of information technology, there are a lot of positive aspects to the use of higher technology.


There are billions of financial transactions that are happening on a day-to-day basis, this is why information technology is perfect for the way the financial systems are set up. The software tools and computer systems that are in place for automation, create huge importance for the use of information technology in finance.

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