Impact of IT on Bank Performance

Impact of IT on depository monetary institution transactionIMPACT OF INTERNET TECHNOLOGY ON BANKS PERFORMANCE AND CUSTOMERS SATISFACTION consider net engineering is actu entirelyy popular and has mevery put ons for the somatic exercisers however it does has nearly elements of security seeks to the imprecate and its customers at large.In this enquiry work, I define to air at impact of profit engineering on Bank, its employees and the customers. more(prenominal) than importantly, efforts were excessively made to research into various risks associated with this applied science such as hacking, spam-email, phishing, in-person indistinguishability operator thieving or crafts and numerous early(a)s.After critical think at this technology and its associated risks especi anyy the identity thieving, dickens notes of solutions were recommended. The first set solutions addressed corporal admission fee catch while the second prep arula deal with authentication by the bidding of fingerprint and voice recognition.1.0 creationThis project is trying to evaluate the impact of Internet technology on borders performance and customers satisfaction. Banking industry is the bedrock of economy, the reconcile of Banks bequeath dictate the state of economy. If it stables, so will the economy. The present global economy recession attests to this statement. engine room figure interchangeable Internet is groundbreaking in verifying organization. Transactions cost of billions of dollars take place in seconds in the electronic circuit passim the globe (Castells, 2001). The banking and financial industry is transforming itself in unpredictable ways (Crane and Bodies 1996). precedent to the rocket of technology in banking sector, the function of the branch was very foreign the function of present branch. Earlier ahead the 1970s, the structure of the branch and functions were comparable to one and other. Product pop the questionings were e qually the same and branches were only avenue for customers to shake bank transactions. Majority of these banks were only relying on one or two branches exclusively with galore(postnominal) staff and cashiers. Customers were subjected to long distant travelling to begin with they could carry out banking transactions. Face to face traditional banking was only manner to bidding bank loan, lead lodgements and withdrawals and customers were subjected to long queue in the banking hall. just now the maturation in the aim of banking technology made the banks started a process of metamorphose that proceed till the end of the 20th century. As rive of process, many channels of distributions were introduced. Among these channels be Automated Teller political apparatus (ATM), Internet banking, Tele promise banking, call-centre, electronic funds transfer, wireless banking, and voice electronic messaging systems, videoconferencing and many others.Rapid bring nearth and developme nt in mesh technology over the last four decades ease up broad impact on plaques. The impact was bluely noticeable in bea of dish ups, products offering and channel processes. Banks pitch use profit technology to cut operations cost, emergence qualities, efficiencies and advance value-added operate to the customers. Also, investment in technology gives competitive advantages to whatsoever Banks jumper lead to tumefy-nigh banks turn over opportunities to perform better than their rivals. Banks through with(predicate) with(predicate) the innovation of earnings technology were able to provide better and cheaper attend tos than traditional system of branch banking. asunder from these, level of banking transactions were equally gaind, thingummy and twenty four hours banking work were excessively witnessed in banking system. More importantly, the level of communication in spite of appearance and outside the banking environment were equally improved, admittance to the expert learning and high quality of services were not compromised. The banking environment became more friendly and flexible.Information that plunder only procurable through the core of technology became an important aspect of the banking. Many passel argued that it was advance in technology of 1990s that made it possible to develop those channel of distributions and system that allowed the banks to render an unprecedented high quality services.In final analysis, this research work assess an aspect of banking that is lacking in Traditional Bank an on railroad line banking and its impact on customer satisfaction and banks performance.1.1 AIM AND OBJECTIVESThe research on Internet technology in banking and acceptance of modern banking by customers get been viewed in diffe bring perspectives but few aspects of this overtation be left field with little exploratory. There is little research on the effects of Internet technology on banks profitability and customers satis faction. Many researchers did not fully determine that Internet technology has immensely affected the profitability level of the banks. The principle behind this is to offer a better reason on how earnings banking is evolving.This study intends to achieve the adjacent purposes1. question the bother of identity larceny and display panel authorisation2. Evaluate the problem concerning alienated revenue3. Research the other work done in this atomic naming public figure 18a.4. Proffer solution to the problem of identity larceny and notification authorisation.5. Implementing solutions and the cost benefits1.2 CONTEXT OF THE STUDYBanks nonplus use internet technology to cut operations costs, add qualities, efficiencies and improve value-added services to the customers. Also, investment in technology gives competitive advantages to few Banks leading to virtually banks having opportunities to perform better than their rivals. This research work is focusing on two impor tant key elements which atomic number 181) Impact of internet technology on Bank and its customers and2) Associated risks with internet technology with more emphasis on identity stealth1.3 EXPECTED CONTRIBUTION TO KNOWLEDGEThe expected contributions to cognition of this research work are to identify various larceny and card authorisation, evaluate the problem concerning lost revenue and proffer solution to the problems.2.0 literature REVIEWIt is my intention to survey literature review to reveal the level of acquaintance and understanding of people about identity theft. A lean of text books, terms and journals internet search are apply for this purpose. Among these area) 50 ways to protect your identity and your conviction card Steve weismanThe book is sound written very relevant to the study and nearly indite. Various shellwrites of identity thefts were discussed. It also explains that the motive behind identity theft could be for financial bring, revenge or malic ious intent. The book goes further to mention some protection rules such as only the attribute cards that involve should be carried in the wallet, the practice of online bank note statement should be rest to, somebodyal propoundation should not be given on phone to un cognize persons, shredding documents that containing private full point after use and so on. except these protection rules only addressed offline identity theft, the issue of online identity theft or drools which familiar to reference book cards were not addressed at all.b) Business Information system (Technology, Development Management) Paul, et alThe book looks at the issues of identity theft, brand abuse and costs of identity theft. The three issues discussed are equally paramount important to this research. The book is good for academic and well beginningd. According to the book, the term brand abuse is used to cover a wide range of activities, ranging from sale of mold goods, for pillow slip softw are applications, to exploiting a well know brand note for technical gain. It was further express that with regards to identity theft, CIFAS(www.cifas.org), a UK-base twaddle barroom service, report that there were 80,000 cases of identity theft in the UK in 2006.The coated in the companys meshwork target showed that identity fraud cost UK economy 1.5b in 2005 and gene steps a revenue of 10m each day for fraudsters.c) Identity theft literature review- Graeme, R.N Megan M.MIt is a well written phrase and equally well referenced. In this article, the authors focused on two important issues, the first one is the cost of identity theft while the second one focuses on the issue of legislations. The two issues discussed are very relevant to this research. The authors look at various identity legislations passed to take hold the villainys of identity. (www.house.gov/apps/list/press/ca29schiff/062304idThef2.html).d) Enquiry in to the attribute card fraud in E- payment- Jithendra, D. Laxman, GIn this article the authors look at reference point card Hacking and types of ascribe card frauds. This article is not well referenced and authors break outed to proffer adequate solutions at end of the discussion.In my opinion, the article is some(prenominal) related to this research work but the sources of documents used to write the article cornerstonenot be easily traced because it is not right referenced. However, it is very helpful indi adviset in understanding the background of the topic.e) Identity theft and credit card fraud Sarah P. MillerSarah Millers article examines the various tactics the fraudsters use to grade credit card fraud. Some of these tactics are opening a upstart credit floors, existed accounts hijacking, skimming tactic among the other. The article also looks at various ways of protections against credit card fraud and come up with some of security measures to guard against credit card fraud in our society.The article is appropriate ly written and very useful for this research. The source of the article is also quoted as http//EzinArticles.com/?expert=sarahp.miller .f) Improving response time of potentiality process of credit card system- Humid, siti Hafizan AbIt is a journal of computing device science published in February 1 2008. The journal discusses the issue of credit card authorization process. It also explains the pitfalls and benefits of credit card authorization. The journal is very briefs about the topic but all the salient points are well discussed. It gives a website as the only source but fail to give other reference. It is very pertinent to mention that the journal would have been a great assistant to the realisation of the objectives of this research work if it has been properly referenced but the beauty of this journal is that it serves as basis of understanding of the topic.g) 7 guards that minimize the Risk of identity theft Jesse WhiteheadIn this article, Jesse looks at financial costs of identity theft and estimated it to be $50 billion. He further explains that researchers are yet to discover a precaution that is hundred percent guaranties against the risk of identity theft. In final analysis, Jesse recommends the following precautions to slew the threat of identity theft in our society. One, he recommends that hearty security number should not be disclosed to anybody unless otherwise learn by law. Secondly, it was also suggested that social security number should not be carried all about. Shredding all important documents immediate after use is potently recommended and more emphasis should be placed on e- statements from our banks and credit issuers. It was also suggested that a strong password and pin should be created and printing of driver licence number on our checks should be highly discouraged.The author gives this website as the source of article http//EzinArticle.com/?expert=jessewhitehead but no other reference obtainable. It is very relevant to this project as important aspect of the topic is being discussed.2.1 DEFINITION OF INTERNETAccording to Paul et al, internet refers to the physical profit that links computers across the globe. From this definition, the interconnectivity of many computer devices all over the globe is done through the world-wide computer network known as internet. These computer devices store and intercommunicate instruction like worldly concern Wide Web and electronic mail ( netmail) messages. There are other devices like mobile computer, varletrs, web TVs that are connected to the internet. All these devices are revered to as host or end system. Both electronic mail and world -wide web are network application programmes that act on host or end system. Like other internet units, end system endure protocols that regulate the sending and receiving of data in the internet domain. Internet has two major protocols popularly called TCP (Transmission tally protocol) and IP (internet protocol).Com munication links like coaxial cable, copper wire, narrator optics or radio spectrum link end systems together. Data transmission rate of all these links are not the same. This transmission rate is known as bandwidth and is measure in bit or second. lay off systems are indirectly join to one and other vial routers and a router receives development from the incoming communication links and send it to its outgoing communication links. The IP defines the format of receiving and sending information between the routers and end systems. The path on which information is transmitted is called route or path. The internet then utilises package switching which gives room for multiple communicating end systems to share a path of a path simultaneously.Connection of network to the internet inevitably to follow specific name and address and it must be run on the IP protocol. The arrangement of interconnection of the internet is from bottom to top. End systems is connected to local internet ser vice providers by means of feeler network and this access network is refers to as local area network (LAW) or phone based access network. The local internet service providers are then connected to regional internet service providers. The regional internet providers will also connected to national and international internet service providers. This type of internet is called public internet. There are other private networks that cannot be accessed by public. It can only be accessed within the brass instruments and refer to as intranet. It also cultivates use of the same internet technology that public internet is using. other way of defining Internet is to look at its infrastructural that offers services to distributed application. Internet provides opportunity to distribute application on its end systems to share data with each other. The application could be inform of e-mail, file transfer, remote login, and world-wide web and so on. Web can be ran over network apart from the int ernet but this does not suggest that web is a separate network, instead it is one of the distribute applications that work out use of services offer by the internet. Both connection-oriented services and connectionless services are two services offer by internet to the distributed application.2.2 harvest-time OF INTERNETInternet and computer networks began early 1960s. During this period, shout was commonly employed as means of communication. This telephone network utilises circuit switching to transmit information from a sender to receiver and since then, internet extend to grow from strength to strength. There are a number of factors that contributing to this development. pecuniary analysts observe that costs, competition, demographic issues and customer service are the major considerations that make bankers to constantly review their internet bank strategies. It is the belief of these analysts that demand for internet banking products and services will continue to increase. But the major task facing banks now is how to ensure that the benefits of internet banking outweigh its costs and the risks. The strategies adopted by each bank to increase its market share and cost decrement vary from one bank to some other. Internet is a platform through which customers access accounts and general information. It gives customers information about various products and services offer by the bank.2.3 RISKS OF INTERNET SERVICEThere are a number of internet threats around disdain world today. The threat continue to increase as internet become more acceptable means of conducting online business transactions. As banks so heavily rely on internet to reduce costs, so also they become more prone to some risks. fewer examples of these risks are as followingsa) HackingHacking involves attempting to gain un appoint access to a computer system, usually across a network. Hackers only need limited programme knowledge to wreak large amount of havoc. The fact that billions o f bits of information can be transmitted in bulk over the public telephone network has made it difficult to trace hackers, who can make recurrent attempts to invade bank system. For instant, much damage could be done if people gain authorised access to banks network service. Hacker may gain access to banks internal network for two major reasons. It could be for pecuniary benefit which usually associated with identity theft where ain information as well as credit card details is obtained to perpetrate fraud. It could also come inform of malicious intent ranging from deletion of file, deliberate grounding of computer viruses into a system or forwarding vital organisations information to rival. Counter measure like operate-back security can be used to prevent this problem. It operates by requiring the customer wanting access to the network to dial into it identity themselves first. The system then dials the customer back on their authorised number before allowing them access. Als o, system can have firewall to prevent unauthorized access into bank system. Firewall software is use to monitor and control all incoming and outgoing traffic to deny intruders gaining access to the information system.b) despiteful CodeMalicious encipher like worms, Trojan horse program and viruses are written to penetrate a system in golf-club to have access to confidential information or disrupting the bank network. through and through the help of the code, Fraudster can enter the network of a bank without its knowledge and valuable information can be stolen in the process. This stolen information can be used to feed identity theft or fraud. This code attacks are very delicate in that they can replicate and circularise themselves without human intervention.c) IntrusionThis is a process through which an intruder has access to bank network. Usually, the intruders are employees of the bank who have gained access to the authentication information of a bank customer. Intruder cou ld also be an external person who has acquires some skills to get the authentication information of the bank customer. When internal or external intruders have unauthorised access to bank network, vital information about customers can be obtained and later use to perpetrate frauds or devote abominations. To guard against this ugly incident, bank must restrict its employees to some areas of its network.d) Denial of servicesBanks nowadays rely on internet for vexed-hitting communication within and outside organisations. In the process of communication, the bank is subjected to the risk of denial of services. Communication channels of the bank can be blocked, web page may be changed or the system employ to process online business transaction may be attacked. A denial of service attack is associated with an attempt by attacker to prevent legitimate users of a service from using that service. The situation forces the bank to close down services until everything return to normal. This kind of criminal activity was hardly experience until 1999 when the crime became cankerworms in our business environments. The effect of this criminal activity is very great most especially when bank so heavily depend on the internet for online business transactions. Huge amount of bills could be lost to the fraudster through the attack. Attack on Amazon and Yahoo servers in the division 2000 was a good example. The servers of Yahoo was engulfed with series of attacks and The attack was estimated as be 300,000 in the lost advertising revenue alone (Financial Time of November 17, 2000). Another popular of denial of service attack was witnessed in 2004. During this time, a congregation of fraudsters from Russian embarked on a number of denials of service attack on UK bookmaker. The attackers demanded for certain amount of money before they could stop the attack, but the organisation in question (bookmaker) was not ready to give them any money at that time leading to a great los ses of about forty million pound. The effect was very terrible on financial position of the company that very year.e) Brand AbuseIt involves sale of formulate goods like software application to exploit a well treasure brand name for commercial benefit. Fraudster can imbedded the name of reputable organisation into a bogus web page just to portrait the page as high rank one. People that search for this reputable organisation can be routed to the false web page where the counterfeit goods are sold. A lot of people have intention of dealing old(prenominal) products and services but end up in buying counterfeit one through the brand abuse. The effect of this is that people pay high price for less quality goods and services. The brand abuse practice costs most UK organisations huge amount of money and cost continue to increase year in year out. People also are no longer sure that the goods and services buy over web pages are actually genuine one. Many people have been dupes of counter feit unwittingly but thinking that they have bought the pilot program goods and services they intend to buy even at exorbitant price.f) Credit Card FraudThe use of credit card online has become a global phenomenal. This card is being use all over the world to make payment for goods or services purchase on internet, retail shops or restaurants. The proliferation use of credit card online makes the users expose to various forms of risks. The risk could be in form of using peoples personal information to open new accounts, hijacking animate accounts.g) Opening of new accountAfter important details like name, date of birth, social security number is obtained, the fraudster can pretend to be another(prenominal) person in order to create new lines of credits. The victims name can be used to secure credit cards and it may not be known to victim that someone has taken credit card on his or her name. Some people in many cases get to know when they receive calls from debt collectors or wh en they apply for loan and it is not granted due to bad credit rating. Many people have been forced to pay debt they didnt actually own through this process.h) Hijacking accountHijacking existing account is another manner use to move over credit card fraud. Existing account can be hijacked by altering important details of the victims such as personal identification number, passwords, billing or mailing address. The purpose of this is to take perfect control of someones account illegally. The original proprietor of the account may find it hard to regain the control of the account. Even if they regain the control, fraudsters might have shipwreck serious havoc on financial reputation of the original owner of the account. It takes victims some time and money before they could clear their names from this mess.i) grazeIt is very common in the restaurants, stores or automated Teller machine. skim is done through the use of palm-sized card -reading devices. This device is capable of swip ing credit card information. It is very delicate in that it may not be noticed until the victims witness unsolicited charges on the statement account of their credit cards. Many of these devices can be planted into Automated Teller machine slots or strategic locations that are not visible to the people. The aim and objective of doing this is to illegally capture important details of targeted victims. The details collected through this method can be used to perpetrate frauds on customers accounts or use to site crime in the name of the victims.j) PhishingPhishing is another method that thieves use to lure people to supply their personal information through false e-mail and web sites. Customers may receive bogus electronic mail through a web site telling them to update their details. The web site may look like that of normal bank they use to visit. But when they access this web site, their account numbers and passwords will be demanded for. Both password and account number are colle cted through this method and later use to siphon money from customers accounts or credit cards. Barclays Bank and some highly reputable organisations were a victim of the crime in 2003.This method of stealing is hardly to detect because the e-mail and web site are made so similar to that of original banks. The only preventive measure is for the banks to educate their customers to ignore such e-mail whenever they receive it. Although this will not totally wipe out the crime because many online customers will still respond to such e-mail but additional measure like authentication which involves adding an extra field to a record with the contents of this field derived from the remainder of the record by applying an algorithm that has previously been agreed between the bank and customers will go a long way in countering this crime. Multiple passwords can also be employed to counter the problem. Furthermore, there are many more of internet threats around but this research work will focu s majorly on identity theft and card authorisation.2.4 indistinguishability THEFTAccording to available information, identity theft and identity fraud are not new crimes. Both have been in existent for a while and continue to be among the fastest growing crimes in the UK. These two crimes can be perpetrated without a thief even burgling into your home or have physical contact with your computer system. The problem is likely to get even worsened because of economy recession that grips all the nations. Information gathered from banks reveal that policy fraud is increase by 17% and identity fraud seems to be following the same pattern. If bank customer identity is compromised he or she may find it hard to have good access to a loan, credit card or mortgage until everything is resolved. We are all victims of these crimes. We in the end pay highest prices in shops, highest pursuance rate on mortgages and higher pension on our insurance policies for no other reasons than this problem o f fraud.Government and corporeal individual organisations have been making frantic efforts to reduce these crimes. But in spite of all these efforts, the rate of identity theft and identity fraud are yet to reduce and number of victims of these crimes are also change magnitude on alarming rate. According to (UK payments, the UK trade association for payments, 2008) card fraud losses total 609.9m, online banking fraud losses 52.5m and cheque fraud losses 41.9m. Furthermore, of identity fraud in 2007 was quoted to be 65,043 according to CIFAS, the UKs fraud prevention service. The 2003 survey of Federal Trade Commission (FTC) indicated that about 3.25 million Americans had lodged complaints that their personal detail was illegitimately used to get credit cards, obtain loans, rent apartment, and enjoy medical facility and some time use to commit crimes. Also, more than 5 million Americans were victims of credit card frauds where personal detail was used to obtain lines of credit and twenty five million irrefutable have been victim of identity theft.WHAT ARE IDENTITY THEFT AND IDENTITY FRAUD THEN?Identity Theft is situation where by an individuals personal information or confidential detail is steal by another person without their knowledge. But Identity fraud is committed when thieves use this information to secure credit, goods or other services in the name of targeted victim without his or her knowledge.Another definition describe identity theft as anyone who knowingly transfers or uses, without lawful authority, any name or number that may be used, alone or in conjunction with any other information, to identify a specific individual with the intent to commit or aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable state or local law (1998 identity Theft Act, U.S public Law 105-318).2.5 REASON FOR IDENTITY THEFT FRAUDReports so off the beaten track(predicate) on various form of iden tity thefts indicated that fraudsters commit identity theft for a number of reasons. But the most common one area) ConcealmentMany people commit identity theft simply because they want to cover their past criminal records. Some people in the past have committed one crime or the other and want to cover them to avoid arrest. A very good example of this scenario was that of September eleven terrorist. All 19 of the September 11th terrorist were tangled in identity theft in some way (Willox and Regan 2002) many people were wrongly arrested because their identities have been stolen. Also, a number of people commit identity theft because they want to hide their bad financial records which denied them access to essential banks products or services such as bank loans, mortgage, account opening or credit card. In some situations, identity theft can be committed to avoid payment of existing debts. These type of people may want to enjoy normal life again and the only way they can achieve this is to masquerade themselves under the identity of another person. The effects of these criminal activities are that warrant arrest and quest may be issued in the name of victim customer.b) Financial benefitInvestigation conducted from various banks indicated that many fraud cases reported in the young past revealed that people committing identity theft for financial gain. In some cases, thieves steal personal information of innocent persons to open a line of credit cards accounts. Along the line many goods and services can be purchased in the name of targeted victims. In the same manner, details of another person can be used to secure loan from bank and account abandon later after fraudsters might have make a lot of money from the accounts of victims. A friend narrated his experience where fraudster obtained his personal details to secure a loan of about 10.000 from a commercial bank without his knowledge. The fraud discovered some months later when he authoritative a letter fro m the bank that sum of 10.000 plus accrued interest is due for payment in his account. The fraudsters have used his identity to have illegitimate financial gain. The case took him some legal battles and time before he could exonerate himself from this mess.c) RevengeMany banks have witnessed identity theft through the activities of their employees. Some employees of bank may collude with fraudsters to steal details of customers as retaliation to the termination of their appointments or the bad treatments they received from their employers. In this process, valuable banks information may be sold to competitors leading the bank to various litigations and financial lost. Also the reputation of the bank may be seriously damaged. The effect of this is decline in profits and low support of the customers.2.6 TYPE OF IDENTITY THEFTMany Bank customers have been victims of identity theft by one way or the other and type of identity will largely depend on the definition bragging(a) to it. Bu t the most prominent one is credit card. Information available reveals that credit card fraud on internet has been seriously increase due to the opportunity offered by new improved internet technology. Apart from credit card fraud, there are other types of identity theft such as extortion, phishing, financial scam, avoiding arrest, organized identity theft and many others.a) ExtortionFraudsters have many ways of extorting money from banks and customers but the two common one are cyber squatting and the threat of leaking customers information. Cyber- squatting, this method of extortion related to registering a bogus internet domain to