Impact of the Internet on Delivery of Financial Services in Canada
Impact of the Internet on Delivery of Financial Services in Canada
Introduction
As the business world these days is highly driven by globalization pressures and increased focus on integration of global marketplaces, the rise of technology has changed the manner in which businesses carry out their activities. Specifically, such a technological revolution could be easily noticed in the finance industry of every economy or country. With an introduction of technological advancement, the nature of finance industry, particularly in Canada, has changed from holding of tangible securities to the intangible assets.
People in Canada used to carry stock and bond certificates while carrying a lot of money with them due to increased attention to internet based accounts as well as debit and credit cards . These days, as various technologies and applications are introduced in Canada, the internet has certainly changed the traditional ways of doing business in finance industry. People no longer need to carry heavy cash and certificates since each piece of concerned information is stored over a centralized system in Canada. In such a pursuit, this paper examines the manner in which the rise of internet has influenced the delivery of financial services in Canada.
HO: The rise of internet has no significant influence on the delivery of financial services in Canada
H1: The rise of internet has significant influence on the delivery of financial services in Canada
Impact of Internet on Delivery of Financial Services in Canada
Technological advancements have always acted a one of the great facilitators of change management in the financial services industry of Canada. Financial intermediaries in Canada tend to view internet as an alternative to deliver their products and services. This is mainly because of two reasons. One is the lower costs of an electronic transaction while the second is consumer demographics who may be increasingly interested to access internet for using financial services in Canada.
Internet in Banking and Finance Industry
The internet emphasizes the development of electronic networking since every financial transaction within and outside Canada focus on sharing of information as well as enhanced consumer experience. As the finance industry of Canada is highly dependent on internet based services, it has become easier for this industry acquire knowledge about competition and respond quickly to global developments in finance.
More than fifty five percent of population in Canada use internet based financial services as a primary choice. Despite this, more than ninety percent of Canadians agree that the internet based services have made delivery of financial services more convenient .
Apart from this, as different credit scores as well as customer default profiles are available over the internet in the finance industry, it has become convenient for the financial intermediaries of Canada to deliver their financial services accordingly. The finance industry can save itself from default risk as the internet keeps and shares customer related information available for them.
As far as the stock market trading in the finance industry of Canada is concerned, the internet provides real-time experience and first-hand information to every potential investor. Due to availability of large volume of data and companies analysis over the internet, Canadian investors find it very easy to access accurate data and make timely investment decisions. Also, while trading, internet provides all investors a facility to buy and sell securities with a single click for earning lucrative returns on their investments.
One of the good examples that have revolutionized the financial service delivery in Canada concerns the availability of information about every stock broker over the internet. As virtual information is available to all potential customers, it becomes easier for them to select the broker and related financial services. Online brokerage rankings are also provided on the basis of certain parameters that make it convenient to select brokerage services from a longer list . When majority of brokerage services are compared online using internet, customers can go through costs and benefit analysis to determine which services suits them the best.
In the same manner, the credit rating agencies also form an integral part of the financial services industry of Canada where the names of Moody’s, Fitch, and Standard & Poor’s are important in this regard. Before underwriting any bond issuances, it is imperative that credit rating on them should be assigned to such issuances to make investors be assured of any risk of default on part of the issuer. The internet facilitates this particular family of financial industry by keeping all credit ratings and scores available to all investors.
Fund Transfers and Payment Settlement
With the rise of internet, people no longer need to carry large sum of money prone to be theft or stolen. Instead, financial services in Canada concerning money transfers are carried out by certain unions such as Western Union that can helps its clients send and receive money in more than two hundred countries with just a click. The name of Visa Direct is also prominent in this regard that contributes to convenient financial service delivery with the rise of internet. In Canada, the major payment systems are managed by Canadian Payments Association (CPA). For payment settlement through electronic money (e-money), credit and debit cards as well as cheques, payments are processed through the Automated Clearing Settlement System (ACSS) and Large Value Transfer System (LVTS).
With the emergence of internet and advanced technologies, the finance industry of Canada can easily transmit, reconcile and confirm payment orders for online settlement. Upon confirmation, payments are released with online fund transfers via internet technologies for clearing and settlement .
Online Community Development for marketing and Insights
Another impact which the internet based services have on the delivery of financial services in Canada is that the social media campaigns and consumer analysis has become convenient. With the rise of internet based technology and services, financial institutions can easily gain access to unique needs of their target market. At the same time, financial intermediaries can easily gain valuable insights about their consumer experiences with the rise of internet.
The delivery of financial services has also become convenient with the rise of internet as financial intermediaries can lunch online communities and introduce their products as well as services to their target market. In other words, internet has helped financial institutions offer their services to targeted audience with minimal marketing efforts. Here, leaders in finance industry of Canada have been able to reduce their costs of marketing and advertising while still becoming capable enough to access broader target market at a global level.
With internet, expert professionals and consumers can come online to a common platform and share their knowledge. In Canada, financial service providers do not need to physically visit their customers for documentation. Instead, as all information is available over the internet, users can themselves select from a wide range of financial services being offered within and outside Canadian boundaries .
Conclusion
After a careful analysis of internet based delivery of financial services in Canada, one can easily be convinced to reject the null hypothesis. Here, it is agreed that, after accepting our research hypothesis, that the rise of internet certainly brought dramatic impact on the delivery of Canadian financial services. As most of the information is available and shared over the internet for carrying out comparative analysis, financial intermediaries find it easy to reach their target and demonstrate their competitive advantage over others. Moreover, credit rating agencies and banking institutions can access data over the internet to save themselves from default on financial obligations. The timely and effective delivery of financial services in Canada has also gone through major developments due to internet.
References
Beynon-Davies, P. (2013). Business Information Systems. Palgrave Macmillan.
Camarinha-Matos, L. M., Bénaben, F., & Picard, W. (2015). Risks and Resilience of Collaborative Networks. Springer.
Carrick, R. (2014, November 26). Canada's best and worst online brokers in 2014 . Retrieved March 23, 2016, from The Globe and Mail Newspaper: http://www.theglobeandmail.com/globe-investor/online-broker-rankings/2014-online-broker-rankings/article21783584/
CBA. (2015, July 29). How Canadians Bank . Retrieved March 24, 2016, from Canadian Bankers Association: http://www.cba.ca/en/media-room/50-backgrounders-on-banking-issues/125-technology-and-banking
Ryan, J. (2011). Personal Financial Literacy. Cengage Learning.
