Financial Information System

FINANCIAL INFORMATION SYSTEMS

FAITH MUYA

BBU/1067/11

FINANCIAL E-COMMERCE

IMPORTANCE OF E-COMMERCE IN FINANCE

The utilization of information and communication technologies is altering the way we communicate, organize work, and companies do business and create economic values. The financial industry as we know it today is mainly based on ICT means regarding its processes, structures, products, platforms, and channels of interaction.

Financial markets with their products and services are nowadays global and mostly determined and shaped by ICT. The financial industry was one of the very first ones to utilize the means of ICT back in the 1960's. Due to the immateriality of the business, the industry is predestined to utilize new technologies but is also vulnerable to its effects. Especially in information intensive industries like the financial industry, the fundamental changes of basic business models can be described very clearly and convincingly.

The development of financial services supported by information and communication technologies (ICT) can be assessed from two different perspectives. Electronic commerce, perceived as the utilization of the 'Net' and its services for additional communication, marketing, and sales channels, based on only very moderately changed business models, indicates an evolutionary path of development. However, alongside with this evolutionary development of electronic commerce lies a more revolutionary path of development.

When examining the current appearances within the financial industry, the following developments are perceivable:

A general disintegration of traditional value chains, at the same time a re-integration, resulting in the emergence of new intermediaries as important elements of emerging value webs,

Emerging new and reconfigured products,

Shift towards customer-oriented, need-driven service bundlings, and emerging, highly sophisticated platforms as well.

It helps in state-of-the-art analysis as well as the discussion...