The Banking Industry Is Also Highly Affected By The Evolution Of Technology.

The banking industry is also highly affected by the evolution of technology. In this area some of the most dramatic changes in banking business have occurred and are occurring. Compared to past perspectives in which banks were afraid of the uncertainties in relation to making heavy investments in technology, today for those who seek a competitive edge investing heavily in the development of technology is a major factor of their respective strategic operations (Meric & Meric, 2001). This is not surprising when it is considered that technology has enabled the banking industry to innovate in terms of new ranges of financial products, distribution channels for these services and better customer relationship management systems. For example, the computerization of the standard transaction model has reduced the need for paper records and checks. In addition, taking Egypt as an example there have been many changes in banking such as the way of delivering financial services by using the internet and electronic cash a feature then we can say that is being replicated both in developed and developing countries (Kamel & Hassan, 2003).
However, these changes present both opportunities and threats. The developments taking place in information and communication technology have increased the levels of competition for financial institutions. For new players entering the market they even it can be stated have an advantage in its 'legacy system' compared with traditional banks and the ease of access to technological implementations has attracted many new entrants to the sector. Therefore the usage of technology in order to create competitive advantages is essential for banks particularly for those involved in retail banking (Harper, Randall & Rouncefield, 2000).
Powerful forces then have shaped the banking industry including it must be noted changing customer needs and their choices of financial services. By the middle of the 1990s internet based services had rapidly emerged in usage and coverage, such as for example E-mail and these non-financial usages have led to their application and deployment in creating a new way of banking (Wiggins, 1995). Furthermore, there has been a trend for individuals to invest their savings such as their retirement money rather than saving it in traditional deposit accounts in banks so as to seek higher return rates on their money which reflects these changing customer needs. While traditional banking systems offered high level of commercial risks a growing emerging feature has been the alternative of non-banking sectors, including for example mutual funds.