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Impact of Information Technology On Financial Globalisation

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Introduction

IMPACT OF INFORMATION TECHNOLOGY ON FINACIAL GLOBALISATION INTRODUCTION Marshall McLuhan rightly pointed out in 1968 that world is progressively en route towards 'global village'.(). We are gradually moving away from a world in which nationalized economies were relatively isolated from each other by barriers to cross boarder trade and investment- by distance, time zones, language, national differences in government regulations, culture and business systems.1 Over the past few decades, the world has been experiencing a phenomenon, which has seen the proliferation of technology at exponential rate (Cairncross, 2001). It has shrunk the world and reduced the importance of geographical location of market. The domestic barriers no longer restrict travel and communication, finance and trade; rather they operate on a multinational or transnational scale (Stephens, 1999). An unending series of technical advances has transformed the way we work, communicate and view the world. Information technology (IT), which includes computer and telecommunication technology, has been hailed as one of the most strategic and pervasive technologies.2 Today Business, Governments, and even non-profit organisations are using information technologies to become more efficient and provide better customer services at national as well as international level3. ...read more.

Middle

Internet has allowed consumers access to global marketplace from the convenience of their homes and offices, twenty-four hours a day. (). E-commerce, which includes online credit card transactions, e-cash, e billing, e-cheques, electronic invoices, purchase order and financial statements has transformed the business practices through B2C (business to consumer) and B2B (business to business) commerce. Consumers have gained more powerful and efficient purchasing in the electronic marketplace through B2C e commerce. Sharing of information between consumers has resulted in new products and improved services. Global price competition has resulted in lower prices for buyers. But the real effect of e commerce in globalisation has been through B2B e commerce, which accounts for more than 80% of electronic commerce in the world today. It is helping many companies to buy their products and services or sell them products and services. Gartner (2001) predicts that only B2B e commerce will total $8.5 trillion in 2005. ().` IMPACT OF INFORMATION TECHNOLOGIES ON FINANCIAL SECTOR: Financial markets cover a wide range of institutions and practices through which lenders and borrowers are able to interact. Lenders include banks and other financial institutions that gives loans to individuals and institutions.() ...read more.

Conclusion

(). Increase in the productivity has resulted in the fall of prices and improvement in quality (www.hicss.hawaii.edu/HICSS_34/PDFs/OSSCI03.pdf) CONCLUSION Technology has most definitely changed the Marshall McLuhan's famous term to 'global e village'. Although technology has been playing a significant role in the strengthening of globalisation since the invention of steam engine, this is the development of information technology that has really intensified it. Today world and global economy are under heavy influence of technology. Financial sectors, multinational corporations and production facilities are the sectors, which have really benefited. It has transformed the business and functional strategies of financial institutions like banks and investment companies, by giving them an opportunity to target international customers while not loosing their focus on local ones. Without these technologies it was not possible for large multinational corporations to start and manage their subsidiaries all around the world. Information technology's part can be also seen in the productivity by reducing processing time and complexity. With the substitution to human labour it has revolutionized the production organism. (http://hsb.baylor.edu/ramsower/ais.ac.96/papers/neunaha.htm). In fact this is information technology that has made the notion of economic globalisation and a single global economy possible. 1 http://www.cheathouse.com/essay/essay_view.php?p_essay_id=13737 2 http://www.indonesia_ottawa.org/economy/G8/G8_it_revolution.htm#gg 3 http://www.guardian.co.uk?globalisation?story 4 http://www.guardian.co.uk?globalisation?story ` 5 http://www.guardian.co.uk?globalisation?story/0,7369,823274,00.html 6 http://www.unesap.org/drpad/publication/survey1999/svy4d.htm 7 ?? ?? ?? ?? ...read more.

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