IT & Financial Services Essay Example | Topics and Well Written Essays - 2000 words

IT & Financial Services - Essay Example For this, the needs of financial transactions arise on a regular basis. In these days information technology is the biggest invention that contributes to the welfare of humanity. It not only speeds up the mode of everyday life but also makes life easier. â€Å"Time† is the most precious element in today’s life. The value of time is the biggest concern for everyone. Digitalization and introduction of information technology in the field of financial transactions help mankind to a great extent (Mann & Mann, 2011, p.264-320). Initially it needed some specific computer or web based knowledge to pursue such transactions. However, once a person got the access to knowledge of computer and information technology systems, it turned into the most desired mode of transaction. The online banking facility is one such application of information technology which emerged as the best way to transfer money in short time (Stathopoulos, 1995, pp.56-79). People used to save money in banks no t only for getting interest but also for its security. The implementation of information technology in personal financial transactions, however, gave rise to questions on security. The online banking system depends on a username and password to access an account. So it will be very crucial to make all the transactions in a safe and secured way. Different measures are taken to ensure the security of financial transactions. The measures include generation of one-time passwords, alerts for password changes at periodic intervals, provision of net-secure codes in financial transactions (Glaessner et al., 2002, p.145). Financial transaction When a transaction in terms of money is carried out between two people namely the buyer and seller in the market, such transactions are known as financial transaction. As the transaction is done, the financial position of the two parties gets altered. In most of the cases, a financial transaction is done on account of receipt of different items which c an create value in the form of information, goods, and services. In ancient times, there were no concepts of financial transaction. People used barter system in order to exchange goods and services. The traders faced problems in this system as they may not have needed such items or services in a certain swap. Next, valuable metals like gold and silver were introduced to carry out the transactions. With the advent of civilization, the monetary coins and printed flat money were used for the transactions. These are referred as financial transactions. In the 20th century floating currency gradually got replaced by fixed currency. In recent times, the computer networks are used for electronic mode of money transfer which increased the speed of transactions. However, the advanced mode of electronic money transfer has its own complexities as well (Friedland, 2010, p.245). The money which can be exchanged electronically by using computer networks and internet is known as electronic money or e- Money. When the money is transferred from one account to another through computer using the software and applications of information technology, it is referred to as Electronic Fund Transfer (EFT). The other modes of financial transaction include the use of wire transfer, payment card, debit card, direct deposit, online banking electronic benefit transfer, etc. (Friedland, 2002, p.287). Wire transfer- It is also known as credit transfer. Wire transfer involves transfer of money from