Online and Mobile Banking: Should I Make the Switch?
My adult children keep telling me to get with the times and do my banking and bill paying online or with my smart phone. I’ve always been a paper file kind of person. Is my information really safe if I make the switch?
The trends and sophistication of online and mobile (using a smart phone) banking are ever increasing and have been even prior to brick and mortar locations being closed due to the COVID-19 situation. The FDIC shows that in 2017 about 40% of people with bank accounts used online banking. Studies show trends to increase by 15-20% in each year after and include mobile banking through smart phones. But, I understand the notion of just because a lot of people are doing it, that doesn’t mean I want to. Here are some benefits for making the switch:
Let’s first discuss security: Banks are required to use standards of security and simply put, they currently use about a 250 bit encryption process (through a cryptographic algorithm) to keep your information safe as it’s being transmitted and once it’s stored. A 2018 U.S. News and World Report article states “Your bank should require multifactor authentication to access your account online. This means requiring more than just a username and password… Added steps could include answering a security question or entering a code sent to your phone. Accessing your account with a mobile app should require a passcode or biometric scan.” If you want to read more about all the requirements and security protocols you can visit the National Institute of Standards and Technology’s website www.nist.gov.
Other than data security there are a number of other benefits to making the switch such as:
Convenience: Stay home and save trips to the bank – especially now as many locations are closed for COVID precautions. Many banks’ mobile apps now have the ability to use the camera to scan a paper check and deposit it into your account. You can easily transfer from savings to checking and vice versa, even among varying banks/financial institutions. You can set up automatic payments, so you don’t have to take time to sit down and write out checks to mail – saves time and postage and you don’t worry about incurring late fees.
Other online/mobile features include the ability to pay an individual (like your bridge partner who you spilt the lunch check with or a golf buddy who organized the tee time) through a feature like Zelle where you pay from your bank account to hers without exchanging bank information.
Convenience & Security: You can easily see when funds have been paid out of your accounts in real time instead of having to wait for a paper copy of your statement to arrive at the end of the month in the mail (also true for credit card accounts). You also don’t have to worry about those statements, which often contain account numbers, getting into the wrong hands… This leads to another benefit of going digital:
No more having to shred those files! For years, it’s been standard protocol to keep important paperwork for at least 5 years. Well, that means you have to find a safe and secure physical space to store it all…and then destroy it properly when it’s no longer needed. Most of the time what ends up happening is it doesn’t get destroyed in a timely manner and has to be dealt with (often by a spouse, adult children or whoever may handle your estate) at a less convenient time such as a person’s death, downsizing, or facility placement. If your information is safely digital, you can organize a way for your executor(s) or financial power of attorney to be able to gain access in your place. This is another added convenience:
Ease of Access/Searchability: If your financial power of attorney has to step in to help on your behalf and you’ve set up a method for access – either ahead of a needed time or UPON the event you cannot, he or she can easily see statements, auto payments, sources of income etc. which makes their job of assisting much easier.
Oversight when appropriate: If you have a spouse/significant other or trusted family member who you’d be willing to give online banking access to (Don’t skip important step of setting up financial power of attorney), you remain confident that you have some help with checks and balances to ensure you are keeping track of all of your bills, payments, appropriate donations, etc. There are ways to ensure this happens without giving the person access to SPEND to funds.
It’s possible when you understand the security requirements and weigh them with the benefits and ease of use, you may find yourself ready to make the switch. Now, figuring out how to set it all up… if you have a middle school grandchild, he or she can probably do it in five minutes… Or, an Aging Life Care Manager can give you tips on who to ask and how to go about making the change.
Caregivers and Online Assistance
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