A STUDY ON IMPACT OF ICT ON FINANCIAL SERVICE SECTOR

1. A STUDY ON IMPACT OF INFORMATION
AND COMMUNICATION TECHNOLOGIES
ON FINANCIAL SERVICES SECTOR
FEMY MONI
ASSISTANT PROFESSOR
ST. ALOYSIUS COLLEGE THRISSUR

2. INTRODUCTION
Information technology plays a huge role in financial
services for many different reasons, but most
importantly on the electronic networks that exchange
information. Since cloud-based technology information
is so often used, the importance of information
technology is incredibly vital. ICT offers new
opportunities for economic and social development,
but at the same time generates new challenges and
risks. Our working hypothesis is that while recent
financial innovations (particularly those related to the
application of ICT) pose a serious challenge to the
financial industry’s business model and, if not
responded to timely and adequately by regulators, may
create new risks to financial stability.

3. OBJECTIVES
 To understand digital transformation trends in
financial sector.
 To know the awareness about the ICT tools used for
financial services.
 To know the impact of ICT on financial services.
 To identify the problems faced by respondents while
using ICT.

4. RESEARCH METHODOLOGY
The data were collected from primary as well as
secondary sources. Use of well framed questionnaire
helped to collect primary data more easily. Secondary
data collected from various books, national and
international journals; Government reports publication
from various website which focused on various
aspects digital transformation trends and impact of
ICT on financial services. Purposive sampling method
were used to select the sample from population

5. ANALYSIS
The convergence of ICT and financial services has created
a new paradigm in the digital economy—the “Techno-
Finance” Industry.
TECHNO FINANCE
Techno Finance is the technology and innovation that aims
to compete with traditional financial methods in the
delivery of financial services. The use of smartphones for
mobile banking, investing and crypto currency etc. are
aiming to make the financial services more accessible to
the general public.

6. DIGITAL TRANSFORMATION TRENDS IN
FINANCIAL SERVICE SECTOR
 MOBILE BANKING
 MOBILE PAY
 MOBILE APPS
 BLOCK CHAIN
 AUTOMATED WEALTH MANAGERS
 BIG DATA
 CLEANING UP THE SMOKE AND MIRRORS

7. IMPACT OF ICT ON FINANCIAL SERVICE SECTOR
• Progressive financial services companies are on the lookout
for new technologies to improve efficiency and speed of
service, as well as provide better customer experience.
• Exponential growth in information technology has
prompted companies to leverage digitization of banking
technology to transform the financial services industry
through customer experience management.
• The financial services industry is looking at improving
online customer service enabled by competition with
consumer brands like Amazon, Facebook, and Google.
Importantly, most financial services executives feel
improving the customer experience to be the top driver of
digitization in banking.

8. • The advent of smart analytics allows financial services
companies to mine the wealth of consumer data to
understand and service customers better. Technology has
also helped organizations develop innovative financial
services.
• The development of better payment systems is a key
challenge for organizations.
• There is also the possibility that Rob-advisory will be a
significant application in financial sector
• Block chain - based services will gain in popularity in the
recent years.
• It ensuring that the financial transactions are secure and
reliable.

9. • Digitization of financial services is an ongoing revolution.
Enterprises have the choice of making innovation the focus
of a stand-alone organization or they may integrate it
throughout their organization. This demands “great
engineering.” Firms will do well to have a full stack of
engineers who can introduce dynamism to deal with
innovation while adopting a start-up approach.
• Financial services organizations can tap the potential of
the cloud to make processes more transparent and
collaboration easier.
• ICT helps to reduce the cost of activities

10. RISKS AND CHALLENGES GENERATED BY ICT IN
FINANCIAL SECTOR
 Strategic risk of IT
 Cyber Security and incident response risk
 IT resiliency and continuity risk
 Technology vendor and third party risk
 Data management risk
 IT programe execution risk
 Technology operation risk
 Risk of ineffective risk management risk

11. 42
58
Number of Respondents
Male
Female

12. Awareness level Very high High Neutral Low Very low Weighted
mean
Mobile banking 78 15 5 2 0 31.27
Mobile pay 45 24 13 10 8 25.87
Big data processing
2 18 6 12 62 12.4
Block chain service 25 17 6 34 18 19.8
Mobile apps for financial
activities
18 25 32 19 6 22
Automated wealth manager 12 3 9 16 60 12.73
Table showing the Awareness of ICT tools used for
financial services
(Source: Primary Data)

13. Rank factors
1 2 3 4 Weighted average Rank
Mobile apps 28 34 18 20 27.0 3
Mobile pay 25 47 24 4 29.3 1
Mobile banking 35 11 49 5 27.3 2
Block chain services 12 8 18 62 18.4 4
Table showing the Type of ICT tools used by
respondents the most.
(Source: Primary Data)

14. Attribute Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
Average
ICT tools are very
effective to do financial
activities
56 38 5 1 0 4.49
ICT helps to improve the
quality of financial
services
11 52 13 19 5 3.45
The use of ICT for
financial activities are
not secure
68 23 0 9 0 4.5
Paperless currency is
most effective tool.
48 23 9 18 2 3.97
Speed and accuracy of
activities are high
72 12 8 5 3 4.45
(Source: Primary Data)
Table showing the Agreeableness of respondents
towards the following statement

15. Rank
Factors
1 2 3 4 Weighted average
Reduce time of transactions 23 42 23 12 27.6
Cost effectiveness 27 45 24 4 29.5
Ease of use 40 19 41 0 29.9
Technology savvy 10 10 12 68 16.2
(Source: Primary Data)
Table showing The factors which motivates to use ICT

16. Table showing Difficulties faced by respondents while
using ICT in financial sector.
Difficulties Number of Respondents
Cyber problems 35
Internet accessibility 56
Service charge 13
Security issues 24
Unawareness of new technologies 7
Total 135
(Source: Primary Data)

17. CONCLUSION
This study conducted to know the Impact of ICT on financial
service sector. The study revealed that ICT have a huge impact on
the financial service sector. The recently emerged technological
innovations help to ease the performance of financial sector. Easy
availability of information, operations through internet and wireless
networks, robo advisory services, mobile banking, mobile pay etc.
are the major contributions of ICT in financial sector. The study
also focused on the challenges, risks and problems aroused due to
the use of ICT in financial service sector. The major problems
faced by the respondents are the cyber security issues and low
internet accessibility. The respondents are least aware about the
automated wealth managers and big data processing. The most
preferred ICT techniques for financial services are mobile pay,
mobile banking and mobile apps. The most important factor that
motivates the respondents to use ICT tools is cost effectiveness.

18. SUGGESTIONS
 The respondents are least aware about automated
wealth manager or robo advisory activities and big
data processing. So the authorities should take
initiative to make them aware.
 Security and cyber issues are the major problems
faced by the respondents. So the authorities must take
regulatory measures to control these problems.
 Financial intermediaries and advisories should provide
proper guidance for using the ICT tools in financial
sector.