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General Implication Wireless Technology in Financial Industry
The emergence of new technology and its consequent diffusion within the financial industry as revitalized the banking services by increasing their efficiency, reliability and above all, credibility. As such, financial institutions have been at the forefront to embrace it in order to remain relevant among the increasingly technological society. This technology has again provided limitless channels through which many people can invest and monitor their transactions from the comfort of their homes and work places. In the modern society, the introduction of the internet banking and the phone banking has gone a long way in ensuring that customers are no longer subjected to cumbersome nature of traditional mode of banking. Many business people, both large and small scale, can easily transact their finances anytime unlike in the past when they had to operate within the banking hours.
A study by Akinci &Atilgan, (2004) revealed that the internet has created virtual markets where traders can do business through the web. A good example is the popular Amazon, Ebay, Moneybookers in America. The online trading platforms have opened up lucrative business opportunities like the stock market which were initially locked to a selected group of people. In admitting that each business venture has its risk, just like the decline of online transactions in the late 1990s did scare investors, being exposed to newer and conducive business platform through the internet gets people attracted to investing in the bonds market, mutual funds, and initial public offerings.
From the customer perspective, advanced technology banking has brought with it many options insofar as accessing financial services is concerned. Through the phone, customers have access to their bank accounts and command transactions directly through an automated banking system. These transactions include faster deposits and withdrawals, payment of bills, receiving payments and placing loan requests. Automated Teller Machines have enabled people in the modern world to get access to their bank accounts even abroad through the current inventions of Consumers' behaviour has greatly been influenced by the availability of financial options.
Customers want financial institutions that call to task newer forms of wireless technology that increase financial service accessibility at relatively cheaper charges. With time, the customer behaviour has dictated what form of technology is to be embraced by the financial institutions. Characteristically, customers have been known to appreciate wireless technology whose accessibility procedures are nit obfuscated and complex, and such have a taste for simple steps technology, (Akinci &Atilgan, 2004).
Putting the current state of world financial state into consideration it is worth admitting that a majority of countries have more in waiting to cover before being termed as states that have fully intercourse with the benefits of wireless technology and finance. It is not an overboard statement to point out that very little is known about the nature of the internet and the wireless technology in general, (Sadhan, 2009). This fact, you will agree, is a bad revelation to the financial institutions that are overenthusiastic over exploiting the advanced technology so as to sharpen their competitive edge in the financial market whose size is comparable to that of financial institutions in USA and whose purchasing power rivals with those of China (Aladwani 2003).
The top agenda issues prophesied by the business scholars revolve around the technical difficulties and the emerging perfection attitudes and beliefs of the e-finance users. The internet buyers put forward issues of security, governments' rigid policies, consumer privacy and the commercial reputation as top agenda factors within the advanced wireless technology in the world. Considering the up-to-date condition of the advanced wireless finance decision givers must be fully persuaded on the giant benefits of this wireless technology within the financial sector. In this regard, this study finds its data very confident enough to state at this point in time that the advanced wireless technology has offered a lot of benefits on the world financial services area and thus the beliefs and the behaviour of its customers.
Visiting financial services just for knowing the balance amount of the account, standing in long queues for deposit/withdrawal of the money was a normal and cumbersome scenario in the traditional financial era, (Crede,1995).. This was as hectic a job as it was time consuming for working people. With the computerization of the financial process things did speed up however people still had to visit the branches to get their transactional needs met. This was what used happen in the past. However things have changed with time. The advancement in technology and its consequent adoption within the finance sector has changed things for the better.
As a result, the routine tasks associated with the finance sector have now come to be completed in a click. Furthermore, from paying bills, recharging a phone, making fund transfers, depositing money, to taking loans for purchasing a home or pursuing education, all has been covered by financial institutions. Of late, all this can be done without visiting the bank branch as frequently as it was required earlier. These services have added a sense of relaxation to our lives. Banks, with the increasing competition for the efficiency possessed customers, have become to soften their grounds for lending money for some investment.
In a survey carried out in 2004 of about 900 American companies by the Forrester Research (2004), only 39% of the institutions of finance said that they had adopted use of mobile business applications. The biggest problem with their use is the problem of finance. Lack of enough protection combined with the sensitive nature of these financial services, is the major setback to the use of wireless internet services. Fear of encryption plus spillage threatens the stronghold of wireless use in financial institutions. This means that, data being used within the network spilling to the outside of the network area.
A network has to be properly engineered so as to have reasonable network coverage without exposing the presence of the network for several miles. Ekram &Vijay (2007) observes that there is no wisdom in underestimating the amount of appropriate engineering, for both access points and facilities. Nevertheless, wireless technology is now being embraced more in the modern financial institutions to cater for the functions previously left for wired connections. These include, Wireless Limited Access Networks (WLAN), wireless speakers, wireless computer mouse, wireless head phones among others. The use of these wireless machines has been due to the convenience of use, (Ekram &Vijay 2007). Financial institutions require the simplest mode of operations while at the same time being internally complex.
Financial institutions such as banks have now been encroached in the extended use of wireless internets to cater for their customers, (Davis, &Bagozzi, 1999). Some banks have entirely purposed to operate via the internet without having any physical bank branches. Customers are able to access at their own convenience, their essential financial data from anywhere in the world. For this to happen, banks must establish their Wireless Application Protocols (WAP) sites. This is a server environment which helps the bank to run everything by itself.
Security, right of admission and costs are directly controlled by the bank. This WAP service provides an infinite gateway to provide a mobile banking to clients identified with the institution, throughout the world. Standard telephones have been manufactured specially by the specific financial institution for their clients. These help the customers in communication with the bank by use of GSM- technology and for the slow connection; internet banking based on HTML is used.
Banks today rely heavily in WAP services. These allow secure way in to financial services from inside a private network environment rather than a wide public mobile network through national mobile operator portals. As a result customers may use any wireless device to pay bills, execute their payments via credit cards, and also make balance enquiries on their accounts. The stock market has also joined in this as they have also established their grounds in the wireless services, (Davis, 2001). Customers can check foreign exchanges, Treasury bill rates, buying and exchange rates as well as access many ranges of the bank's financial services. A major issue on insecurity has dominated wireless internet banking services. Customers have to be reassured of a reliable and a trusted working environment, (Davis, 2001).
Attitudes, in their characteristic nature, have been known to emerge as products of an interactive process that is impacted upon by the reference group influences, historical experiences and the personality are said to develop over a long period of time based on memorable experiences and personality Karjauloto et al. (2002). In the modern world, discrepancies in behaviour among individual banking consumers have been feasibly theorized and linked with embracement of the IT and the advanced wirelesss technology within the transaction services of financial instituions. As quoted in Karjauloto et al. (2002), Assael (1981) insists that consumer behaviour should be restricted and studied through the lenses of demography, attitudes and culture.
Most academically acknowledged literature within the context of the advanced wireless technology embracement among the banking consumers has repeatedly pointed to the truth that age has come to be of great influence. As Karjauloto et al. (2002) points out, many of the older consumers, and their conservative tendencies, have been known to have difficulties with new wireless technology and therefore more inclined to develop negative attitude towards the technologically informed financial transactions. Furthermore Trocchia and Janda (2000) in Karjauloto et al. (2002), state that characteristically, this older consumers have negative attitude to any form of change within the banking sector that involves the access to their bank accounts.
However, according to Trocchia and Janda (2000) in Karjauloto et al. (2002), it is believed that an individual's personalized attitudes towards wireless technology and its credibility is more influential than age. The usage of wireless technology among the consumers has also raised gender geared discussions due to the emerging revelations that most males use this technologically informed transaction services than do the females. More males than women have been exposed to computer literacy and since prior experiences with computers develop the need to embrace new technology, women have been reported to be more inclined to develop a phobia for this technology and thus a negative effect.
The more consumers trust and use a new wireless technology in banking, the more positive they become to newer and more sophisticated financial technologies. While experiences among group may impact on consumer attitude and culture, it is worth pointing out at this point in time that banking and access to bank accounts is viewed to be more personal and communal and therefore reference group influence may lack that vigour to be named as a major factor.
Within the discussion maxims of advanced wireless technology in finance channels and its impact in the consumer attitudes, beliefs and culture, attitudes and beliefs have overly viewed as variables that are too segmented and should be defined clearly within consumer classifications that are informed by similarities within attitudinal and belief profiles. For instance, the calling to task the four (4) attitudinal approaches to technologically defined banking as presented by Bhattacherjee, (2000), is all befitting. This attitudinal approaches clusters consumers as those that are 'oriented by transaction', 'the generally interested,' 'those oriented by service' and the 'anti-technology group'. Those oriented by transaction include traders who constantly want to access their accounts many times a day and therefore seek quick and accurate service.
The generally interested are the groups of consumers who enjoy the ease at which things are done and are at times too excited by the technology. They become part to any bank that introduces newer wireless technology. The services oriented include the salaried class who are interested in newer banking services which are swift and cheap. The services oriented are attracted by newer loan rates and mortgages. And finally, the anti-technology, as was noted earlier includes largely the older consumers who believe in the business as usual principles. They want things to remain the way they were and will take to long (or will even never) to embrace a new banking technology
The Negatives of Wireless Technology in Financial Industry
A financial institution must first calculate the correct balance of security, control and cost for them to launch a thriving wireless service. This would help the customer in the ease of access to their financial data from any area. Use of wireless networking has been endorsed to provide an alternative for the fibre optics and cables.
Wireless technology has several important business benefits. However, there are disadvantages that face this emerging trend in the financial industry. Firstly, one may suffer problems arising from installation. These problems are not only limited to the financial industry but also the general industry at large. Specifically for the financial industry, this can be bothersome. Installation problems arise from the use of several wireless systems in the same building. When there are several radio sources in the same building or in the same vicinity, it can result to poor communication, other times it may lead to failure of wireless communication all together. At such occasions customers get inconvenienced in their financial hustles while the workforce in the financial institution would work at slower rates due to connection failures.
Secondly, wireless networks can have a coverage problem. Consistency in network coverage for some financial institution buildings may be a problem. This leads to arise of "black Spots" which refers to areas where no signal is available (Fishbein & Ajzen 2005).Delays may arise causing inconvenience to customers who might reconsider being part of the financial institution. Moreover, most financial institutions have their buildings built in steel to reinforce security. This steel absorbs, blocks and sometimes reflects the radio frequencies. Therefore, from such a scenario, one may find it impossible to pick up the used radio frequencies.
Financial institutions need to have a faster operating network than any other institutions. Speed is vital to ease congestion emanating from the cash withdrawal and depositing by the clients, (Fishbein & Ajzen 2005). Also, speed is vital to ease communication within the financial institution workforce. Wireless transmission sometimes can be slower and have a reduced efficiency than the wired networks. This can prove to be a major setback for financial institutions opting to go for the independent use of wireless networks. However, many financial institutions have countered this setback by installing a wired network as the 'backbone' network for the institution rather than the wireless network. The wired network is more expensive than the wireless network. On arise of such times when the wireless networks fail, the wired networks come in handy.
Another major disadvantage of financial institutions using a wireless network service is; insecurity. Security of client's documents and details is of absolute importance to the institution, (Fishbein & Ajzen 2005). A small loophole left can cause irreparable damage in case of hacking. Wireless network transmission is more susceptible to being hacked by unauthorised users. In modern technology, thefts in banks have been monitored via wireless networks. Today's burglars and bank robbers are not the unlearned ones. They are well conversant with operations of such networking systems and can easily use them to get their plan on how to rob the institution. Extreme security measures must be taken to ensure that the data of the financial institution is secure.
Nature of Wireless Technologies
There is an increase in the demand to look keenly into the market as it grows. The issue of the technological rapid development has heightened the par of the financial transactions and those made the terms friendlier in terms of speed of the transaction in question, Akinci &Atilgan, (2004). However there are some major drawbacks that can't afford to go unseen and tabled in order to avoid the collapse of such a rise in the economy of the world as whole; suggesting some of the possible solutions will be a motive towards the drive of full actualization and implementation.
The latter addressed issue is most profound in the newly emerging markets than can be compared to other areas of the wireless networking technology, though given an upper hand of an extensive spread out of cellular advancements in the markets. The more the indulgence of the countries into this financially boosting antique the more elusive is the objective of giving its state leapfrog. It is worth noting that there are however some mechanical breeches that can pop up during essential financial transactions, Akinci &Atilgan, (2004).
Therefore, market participants ought to ensure that problems of such kinds are curbed and that they don't arise anyhow, this is in order to ensure more efficient wireless market reliability. There is need to mitigate the risk of electronic security through diverse actions that may not eat much into the benefits that are anticipated by the market trying out the wireless financial system of operation. Lots of the actions have been recommended by experts in regard to the case of wireless applications in the providence of reliable trustworthiness and efficiency.
There is need to reflect the best action to be carried out, in the today's electronic industry. This action comes on with the necessity of providence that the daily development and rapid technological changes make this task a hard nut to crack. Wireless technologies security requires now-and-then check ups and consistent upgrading of the workability of the intend devices. In this context we note that the cell-phone devices are one of the gadgets that are undoubtedly proven to be the most technically changing in terms of models and workability systems in today's world-wide technological springboard, (Davis, 2001).
In the year1990, the mobile phones in the whole world were just eleven million, by the nearing of the new millennium, in the year 1999, the number of the mobile subscribers shot up to over five hundred people, (Davis, 2001). In the recently conducted researches in an attempt to know how many people own a cell-phone, it has been found out that the figures are double that seen in the year 1999. This, event-rewind is to show how much the mobile has just been populously growing in terms of its usage and how much people are into it.
With the use of a booth network system, used for more than two decades of war, Cambodia, a western country, is resolutely through the worldwide embrace of the wireless technology. In a spectacular incidence, within the ellipsis of twelve months, the wireless connectivity of mobile users beat those of the fixed line telephones. This country, though amongst the countries with the lowest per capita incomes beat thirty one states with telephone penetration even those with much higher country G.N.P's.
Lieu of being a spendthrift in terms of a countries resources and the time needed to firmly establish the booth infrastructure in order to boost the telecommunications, states across the globe are exchanging the expensive infrastructure with the reasonably inexpensive cellular towers. However, there are some specific risks that are entwined and linked to matters associated with security. New delivery channels aimed for the usage by financial services are anticipated to heighten and open opportunities for the banks and related urgencies in the efficient delivering of finance related services in the so-remote areas, this however, is in regard to the aspect of continued integration in the economic sector, (Davis, 2001).
Though, these open business chances are not put down by the factor of limitation of the formal economy. The undeveloped countries and states have notably embraced the technology in a chase to be up to par with the countries that the aspect has blessed. Of need to note is that, this revolution of wireless technology has brought many vices into the society as a medium for theft of financial accessories has been at its rise, in the recent past and to date. For an institution to incorporate a never-failing wireless technology service, then they ought to strike the due balance of security, control and cost in an objective to retrieve the customers' data and information from anywhere.
Good examples of financial institutions include SkandiaBanken, Vakifbank and Postova Banka in Sweden, Turkey and Slovak Republic respectively that work with a view to have their customers' satisfaction in terms of their access to their vital financial information from any place they are, Akinci &Atilgan, (2004). To succeed in this quest, banks ought to install the services of stable cables like the WAP (Wireless Application Protocol), embrace the up-to-date connectivity technology and devices that ensure complete security instillation in and around the banks for the sake of customers' care. In Captaris, there is providence of valuable and efficient links that connect to the mobile phones to effect the action of wireless banking systems for customers who might be far away from the banking halls.
The pop-up concern of safety takes the centre-stage the mobile-commerce; mostly in the area of financial institutions. The cell-phone incorporation in the banking services poses more questions than answers in the matters of security credibility and trustworthiness, this motion is due to the concern that the banks have to ensure that their customers' are fully contended with what they have to offer them, security being of utmost concern, (Davis, &Bagozzi, 1999). The safety of anything in a bank belonging to a customer is paramount and mandatory in order to keep customer and to attract new ones to join the bank, in an effort geared toward the benefits of more customers indulging in the business.
Necessity is geared towards the realization of that the information liabilities of a customer is safeguarded to ensure it is competitive effective in the market arena. For in stance, Captaris has hired the services of Baltimore technologies to cater for their security needs, (Davis, &Bagozzi, 1999). The Baltimore security provides the bank with WAP enabled gateways which in turn offer safe cell-phone access to electronic mail and other related financial services.
The wireless technology has in turn resulted to so much crime rise at an exhilarating haste in the recent past, involvement of white collar crimes is no eye-browse raising issue as it is literally spread all over the world. The process of hacking the phones and getting the secret codes of some bank accounts is venom that is seriously threatening the life of this newly found technology in the banking business as more people are falling for this trap unknowingly; blame it on the technology advancement, Akinci &Atilgan, (2004).
There is also another recent popped up mobile theft known as war driving which includes the use of laptops fitted with WLAN sensor cards that record and show the network traffic, hooliganism of this kind could actually instill fear into minds of the customers' hence a bank loosing more than is supposed to gain. An investigator of the FBI computer related crimes said that the later mentioned type of theft is marrow-deep into the flesh of all institutions that lack or are unable to incorporate the services of the WLANs.
There is a bit of a mix-up in terms of the manner in which the device works which can sometimes confuse the administrator and make them think that they are faulty. This is however a flawed assumption as there is a certain distance that the laptop can detect the connectivity. The above mentioned concerns show how much the aspect of a better and reliable security system is needed. Security policies and laws can also be put into place to help in the curbing of those breeches that deter the forward motion in an institution, correct security configurations can also be put into place and back up by sophisticated security designs that will be uneasily hacked by the hooligans, (Davis, 2001).
In general, banking systems, institutions, business corporations and all the related businesses ought to either indirectly or directly authenticate the customers in regard to the wireless financial transactions carried out. In enforcement of more prevailing security, customers can also offer the banks with the authority to allow transactions of specified parties, (Fishbein & Ajzen 2005).
The future of wireless technology in the financial industry
The wireless communication industry is undergoing several changes that will affect our future financial performance, (Sirin 2001). These changes are significant enough to offer banking subscribers a wide choice of choices to cater for their communication needs. The determination of the pace and growth extent of subscriber demand is uncertain. The use of wireless services is now of significant factor in choice for the appropriate financial institution to member oneself with.
There has been an invention of three digital technologies that cater for wireless technologies worldwide. The time division multiple access (TDMA) has been used by several international businesses while others have been using the Code Division Multiple Access (CDMA) for their wireless networks, (Davis, 2001). With the new trend of global use of mobile phones, a new wireless network has been introduced known as the global system for mobile communication (GSM). In 2007 and 2008 new networks were launched by the previously mentioned Telcel. These were; UMTS and HDSPA. These two were referred to as the "third generation technology" Other changes that this industry is experiencing are; regulatory changes, upgrade of digital instead of analog wireless systems. Currently banks are not using wireless systems to conduct their transactions. This is mainly due to susceptibility of the wireless systems to hackers. For now, banks are on to mobile banking.
Mobile activities by banks are the mobile alerts. (Sirin 2001 says that customers do not find fun staying for hours in front of their personal computers. This was mentioned after the introduction of the which allows the bank clients to be able to manage their bank systems while being from their pc's. New advances in technology have been suggested for the banks to open a private wireless networking area, (Sirin 2001). This is supposed to be limited to the building housing the banks. On the mention of wireless networks, bankers and regulators have their first question on data security. Impending developments in wireless banking technologies are modifying the ERF networks in use of hardware and software to encrypt data. Devices that will be made for the encryption of this data will be monitored daily. This will be done so as to guard against hacking into the banking wireless systems. The use of these ERF will also be to monitor the gulf coasts in areas which are prone to attack from hurricanes and other disasters. The use of these ERFs will also help in the build up of an envisioned interbank network, (Sirin 2001).
The convenience found in the ability of a bank's advanced technology to carry out simplified transactional services and the ultimate dissemination of information or even notifying customers on daily accounts updates through their mobile phones, emails and such, is always the overriding factor that takes over the doubts among the customers who are mostly overwhelmed by security dissatisfactions. As the more confidential and person based user-terminal communication device, the mobile phone, and at times the email, are to some extent the simplest channels through which Saudi Arabian banking customers can be gotten to since they tend to carry the phones to literary everywhere they go. Furthermore, the usages of the SMS banking options in the phone menus which are characterized by the easy-to-follow application key instructions are very simple to use, (Sirin 2001).
The SMS banking options found on the phones are agreeably different from the ones on the internet which provide a rather broader options and functionality, but are much open to those customers who have computers and a reliable internet connection. Again, the speeded on the spot messaging alerts found in the phone banking such as the SMS are very fast compared to the internet banking options like the blog posts, emails and such whose messages to the customers and vice versa are prone to delays and delivery failures. The phone banking option has come to eradicate banking insecurities especially through the SMS banking where customers are kept abreast with issues of ATM fraud and such instantaneously, (Sirin 2001). This ability to use advanced technology in Saudi banks has by and large handled issues of customer insecurity concerns and has thus afforded the customers a lot of confidence and trust with the banks and their information applications unlike in the past.
The void of encryption on the phones' SMS options has always been a very fertile topic for academic and technical discussions. Such lofty discussions are, however, found within the IT departments of the banks due to their ardent skills and experience amassed over the years on the ATM and the SMS banking channels, (Sirin 2001). This deficiency in the encryption within the phone SMS banking platform has caused the banks to eradicate the insecurity feeling among the customers by calling to task the usage of this application only in the areas where it offers an advantage over the other popular channels.
The vendors of the SMS banking applications have found safer ways through which their applications can address top security and confidentiality concerns among the banking clientele. Traditionally, the safer ways include pre-registration and the use of security codes in areas where banking transactions are anticipated to risky. Sometimes the ATMs security codes and PINs are ferried into the SMS banking security but have been perceived to be cumbersome and time consuming to the part of the consumer. The basic challenges within this area of advanced technology in the Saudi Arabian banks are: handset simplified functionality, insecurity concerns and sustainability.
By accepting the cross culture methods of financing there are chances that an alternative approach comes up as an option. At one end the western pay internet while using the funds and the Islamic banking on the other hand prohibits interests; rather they do savings based on profit/loss sharing. For Muslims this helps in sticking to their faith and belief while making use of unused funds in an effective way that may allow them to create new job opportunities.
The future marketing strategy is a method that financial institutions will in future require to keep an edge over in the competition. The firms through marketing try to keep their customers informed about their services and in a way try to persuade them to buy at least one of the lots. Financiers will know that their consumers need a transparent system that could give them complete-detailed information about the products and services they need and ways of building up social community. The ways to enhance customer circle is by listening to the customer needs, engaging them in the services and making them connected to their system. K.M George (1999) shares that the banking marketing strategy functions will need to first attract the depositors and then the borrowers of the funds. This will add an element of complexity to the process. The financial institutions will have undergone a drastic change. Instead for waiting for the customer to visit the institutions with a concern or other needs, financial services marketers will analyze customer needs and then keep revolving those needs based products or services around the customer with a mixture of innovative marketing strategy, (Davis, &Bagozzi, 1999).
To stay at the profitable margins and keeping growing, financial institutions will need to identify their most trusted customer segments. Being a customer driven industry, they will need to introduce products and services keeping their needs in mind. This will help in gaining more trust among customers and thereby with growth comes a stable position in the market. This needs a proper analysis of the customer data and integrating with banks operations. It is the customer satisfaction that the financial institutions will work on since will changing times; customers will look for speed, reliability, safety, convenience, cost, respect, quality, elegance and standards, (Davis, &Bagozzi, 1999).
Knowledge Gap to be Addressed
As a closing shot for this review, effects of wireless technologies in financial industry vary across the two divides: the institutions and the customers. The financial institutions' staff has been made to re-strategize and beef up their skills in tandem with the demands of the new technology. Embracing technology has become inevitable for the financial institutions since it cuts short the costs of staffing, sharpens a bank's competitive edge and ushers it on a newer platform of efficiency. Customers have been more inclined to using these technologically defined services since they are fast, easily accessible and are not limited by any popular spatial-temporal factors. People can pay utility bills, loan instalments, make money transfers, get payroll, do shopping and perform various transactions through these technological platforms.
Whereas this technologically precipitated financial industry's development has greatly been felt in the many parts of the world, very little academic attention has been channelled towards its direction. Considering the fact that there is a great need to have an academically acclaimed literature in this area, it is agreeable that an informed study is direly needed. The intended research is that punctual study that will ultimately unravel the complex but practical nature of technologically driven banking and its effect on both the financial strategy and the customer belief and behaviour. Advised by the set research questions and the objectives, this dissertation anticipates to present tangible case studies whose data will go along way in firmly grounding the research topic.
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