An Historical Appraisal of Information Technology in Commercial Banking

The central role of information processing in banking leads to an expectation that banking and finance companies will be strongly affected by technological innovation in general and applications of information and communications technologies (IT) in particular. This research reviews those effects on banking organizations with reference to front-office or external changes (product and service innovation) and back-office or internal changes (operational function) brought about to banking organizations. Following Fincham et al . (1994), Garbade and Silber (1978), Morris (1986) and Quintas (1991), IT-based technological innovations are considered and grouped into four distinct periods: early adoption (1864-1945); specific application (1945- 65); emergence (1965-80); and diffusion (1980-95). The research then discusses the potential impact of more recent innovations (i.e., electronic purses, digital cash and Internet banking). The research provides a historical perspective on the main drivers determining adopt...

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