Can J Adm Sci Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd. 122 26(2), 122–124 (2009) Forward: Special Section on Information Technology in Support of Financial Markets Ali R. Montazemi* McMaster University Zahir Irani Brunel University Canadian Journal of Administrative Sciences Revue canadienne des sciences de l’administration 26: 122–124 (2009) Published online in Wiley Interscience (www.interscience.wiley.com). DOI: 10.1002/CJAS.101 Markets have three main functions: matching buyers and sellers; facilitating an efficient exchange of informa- tion, goods, services, and payments associated with market transactions; and providing an institutional infra- structure, such as a legal and regulatory framework, that enables the market to function efficiently (Bakos, 1997). Operational efficiency means that market participants are able to conduct transactions at competitive cost, and informational efficiency means that all available informa- tion is incorporated into the price. The degree of infor- mational and operational efficiency determines the extent to which markets are allocationally effective. Informa- tion systems can serve as intermediaries between the buyers and the sellers in a market, creating an “electronic marketplace” that makes it less expensive for buyers to acquire information about sellers’ product offerings and prices (Bakos et al, 2005; Konana, Menon, & Balasub- ramanian, 2000). As a result, the structural change supported through Information and Communication Technology (ICT) in financial markets is expected to provide considerable benefits to users of financial ser- vices by lowering the costs of financial intermediation and improving the ability to manage financial risks and tailor financial products. For example, electronic banking (e-banking) has enabled banks to provide services more efficiently and at substantially lower costs (Nsouli & Schaechter, 2002): a typical customer transaction costing about $1 in a traditional “brick and mortar” bank branch or $0.60 through a phone call costs only about $0.02 online. Not only is ICT critical in the processing of infor- mation, it provides a way for the banks to differentiate their products and services. Banks have to constantly innovate and update their business processes to retain their demanding and discerning customers and to provide convenient, reliable, and expedient services. Technological change can be classified as compe- tence-enhancing or competence-destroying. Compe- tence-enhancing adjustments that build on existing know-how within the organization tend to consolidate industry leadership: “the rich get richer” (Tushman & Anderson, 1986, p. 60). Competence-enhancing tech- nologies consist of a variety of ICT employed by finan- cial institutions to access information (e.g., Bloomberg and Reuters information services, Bloomberg messenger, private chat line, and squawk box) and to reduce cost of inventory control and invoicing (e.g., Portfolio Account- ing System performs an audit trail, verifies trades with counter parties, arranges for payments and settlement, and prepares electronic reports to the Portfolio Manage- ment System, which reports to upper-management and the portfolio managers) (Montazemi, Siam, & Esfahani- pour, 2008). In contrast, the introduction of fundamen- tally different technologies or competence-destroying discontinuities is associated with major changes in the distribution of power and control (Burkhardt & Brass, 1990; Irani, Sharif, & Love, 2001; Lapointe & Rivard, 2005; Schultz & Orlikowski, 2004). Competence- destroying discontinuities disrupt industry structure. For example, a recent investigation by Montazemi et al. showed that the use of alternative trading systems for large transactions have an adverse effect on the social relations and profitable transactions among market- makers and institutional buyers in a fixed-income market. Thus, to benefit from implementation of ICT, we need to fit technological support features to the task. Task- technology fit theory contends that use of technology *Please address correspondence to: Ali R. Montazemi, DeGroote School of Business, McMaster University, Hamilton ON, L8S 4M4, Canada. Email: montazem@mcmaster.ca