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Project 3 Argument: Half Draft
Michael Risper
English Department
ENG 111
Dr. Tiffany Renell Fore
05/06/2024
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The banking and financial sector has undergone significant transformation in recent decades,
largely driven by advancements in technology. From the introduction of ATMs to the rise of
online banking and digital currencies, technology has revolutionized how financial services
are accessed, delivered, and managed. In this essay, I will argue that technology has
profoundly affected and will continue to shape the banking and financial sector, impacting
various aspects such as customer experience, security, and innovation. By examining the
evolution of technology in banking and financial services, this essay aims to shed light on the
opportunities and challenges that lie ahead in the digital era. Technology has fundamentally
transformed the banking and financial sector, enabling greater accessibility, efficiency, and
innovation, yet it also poses significant challenges related to cybersecurity, privacy, and
regulatory compliance.
One of the primary ways in which technology has affected the banking and financial sector is
by enhancing accessibility and convenience for customers. The introduction of ATMs in the
1960s revolutionized the way individuals access their funds, allowing for 24/7 access to cash
withdrawals and basic banking services (Barnes, 2006). Similarly, the advent of online
banking and mobile banking apps has further expanded access to financial services, enabling
customers to manage their accounts, transfer funds, and make payments from the
convenience of their smartphones or computers (Jayaratne & Strahan, 1996). Kalyani, &
Gupta (2023) provide insights into the potential and difficulties of using AI and ML in
banking through a synthesis of previous research, bolstered by quantitative data derived from
the meta-analysis.
Moreover, technology has contributed to improved efficiency and cost reduction within the
banking and financial sector. Automated processes, such as electronic fund transfers and
digital payments, have streamlined transaction processing, reducing the need for manual
intervention and paperwork (McKinsey & Company, 2019). Additionally, advancements in
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data analytics and artificial intelligence (AI) have enabled banks and financial institutions to
gain deeper insights into customer behavior, enhance risk management, and personalize
services (McKinsey & Company, 2018). This increased efficiency has led to cost savings for
both financial institutions and customers, as overhead costs associated with brick-and-mortar
branches and manual processes are reduced.
Furthermore, technology has facilitated innovation and disruption in the banking and
financial sector, giving rise to new business models, products, and services. Fintech startups
and digital-native banks are challenging traditional incumbents with innovative offerings
such as peer-to-peer lending, robo-advisors, and blockchain-based solutions (Gupta & Bhatia,
2020). These disruptive technologies have the potential to increase competition, improve
financial inclusion, and drive greater transparency and efficiency in the sector (Claessens et
al., 2020). However, they also pose challenges for established players in terms of adapting to
new technologies, regulatory compliance, and maintaining customer trust (World Economic
Forum, 2020).
Despite the numerous benefits of technology in the banking and financial sector, it also poses
significant challenges and risks that must be addressed. Cybersecurity threats, such as data
breaches, phishing attacks, and ransomware, pose a growing threat to financial institutions
and their customers (Accenture, 2020). Additionally, concerns about data privacy, regulatory
compliance, and ethical use of customer data have come to the forefront, prompting calls for
stricter regulations and oversight (KPMG, 2021). Moreover, the rapid pace of technological
change and digital transformation can exacerbate inequalities, leaving behind those who lack
access to digital tools and skills (Financial Stability Board, 2017). Many people are
concerned about their jobs especially since they believe that they will be replaced by
technology. Most of the financial activities are currently automated which reduces the
numbers of employees to conduct the tasks.
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Reference List
Kalyani, S., & Gupta, N. (2023). Is artificial intelligence and machine learning changing the
ways of banking: a systematic literature review and meta-analysis. Discover Artificial
Intelligence, 3(1), 41. [Link]
Yun, J., & Jin, S. (2024). The Degree of Big Data Technology Transformation and Green
Operations in the Banking Sector. Systems, 12(4), 135.
[Link]