The Financial Institution Of The Future
By J.J. Montanaro
Spring 2008
In today’s increasingly mobile society, it’s clear that you can take it with you. Smaller and more powerful cell phones, notebook computers, iPods and MP3 players mean that no matter where you are – no matter what you’re doing – you are connected to family and friends, to work and to entertainment.
Today’s technology also means that whether you’re at home, across town or across the ocean, your financial network is at your fingertips, too.
The financial institution of the future will allow you to manage your money anytime, anywhere via telephone or computer. It will give you the freedom to bank and invest electronically – open accounts, move money, make deposits, check credit card and bank account balances, get stock market quotes – 24 hours a day, seven days a week.
We answer some frequently asked questions about the financial institution of the future and how you can use the latest technology to manage your money.
Why is it better to do business electronically? Isn’t it preferable to speak to a “live person?”
There certainly will be times when it’s necessary to seek advice from an experienced banking or investing representative. But for day-to-day financial activities, electronic banking and investing is far more convenient. You never have to wait for banking hours to begin – your financial institution is open day and night, and you’ll never have to step inside a physical branch.
Will the financial institution of the future save me money?
Absolutely! Online institutions don’t have to spend money on building and maintaining brick and mortar buildings, real estate taxes, electricity or outsized labor forces. The savings are passed on to consumers in the form of better rates and up-to-date technology that saves you time and money.
What about the unique needs of military families?
Online financial institutions are tailor-made to serve the unique needs of the military community. Even soldiers deployed in war zones can manage their money via e-mail and cell phones. Distance doesn’t matter and time zones are no obstacle when banking and investing needs are handled electronically.
What about cash withdrawals? Those can’t be handled electronically. What do I do when I need money right away?
The best online financial institutions give their customers easy access to cash through ATMs anywhere in the world. Look for a bank that will reimburse all or part of ATM fees charged by third-party banks.
How can I make deposits to my accounts? Won’t it take days to deposit a check by mail?
Look for a financial institution that allows you to make deposits from anywhere in the world – day or night – with a scanner and a computer. With just a few clicks of a mouse, your money will be securely deposited and readily available.
What if I want to review my statements? How can I track my spending, savings and investment earnings?
With electronic banking and investing, it’s easy to track funds. When you pay a bill online, you’ll see exactly when a payment was made or cleared, simply by logging on to your account. Look for a financial institution that will let you review several months of banking or investing statements online – and one that will let your download your records to financial software, such as Quicken or Microsoft Money. That will make budgeting and record-keeping even easier.
What other benefits do the financial institutions of the future offer?
Look for an institution that is truly personalized – one that goes the extra mile by offering financial advice via e-mail, customized bank account and credit card alerts, and special features such as online debt analysis and start-to-finish loan applications and approvals.
Online banking and investing allows you to receive bills and statements electronically, essentially eliminating the paper trail that leads thieves to your credit, debit and account information. But be smart and safe when handling your finances online. It’s best to follow a few simple rules that can keep your financial information safe and secure:
Protect personal information. Never save your online ID, password or PIN so they are automatically entered when you log on to your account.
Don’t be too forthcoming. Don’t respond to e-mails asking for personal information, such as your date of birth, Social Security number or phone number.
Secure your computer. Install anti-spyware, anti-virus and firewall software on your computer, and keep your operating system current with software updates.
Protect your password. Use a password that is secure. Avoid the obvious, such as birthdays, children’s names or words found in the dictionary. Change your password regularly.
Look for a guarantee. Choose a financial institution that offers an online security guarantee.
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Joseph "J.J." Montanaro is a CERTIFIED FINANCIAL PLANNERTM practitioner with USAA Financial Planning Services, one of the USAA family of companies. Montanaro has served in the
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Advantages Of Online Banking
Convenience: Unlike your corner bank, online banking sites never close.
Ubiquity: If you’re out of your home state or country when a problem arises, you can still log on at any time.
Transaction speed: Online sites usually execute and confirm transactions faster than your nearby ATM.
Efficiency: You can manage all your accounts from one secure site.
Effectiveness: Many sites now offer sophisticated tools, such as stock quotes, rate alerts and portfolio managing programs.
Disadvantages Of Online Banking
Startup may take time: To register, you probably will need to provide ID and sign a form at the bank branch.
Learning curve: Banking sites can be tricky to navigate at first.
Site changes: Banks periodically upgrade their online programs, perhaps requiring you to re-enter account information.
Trust: Did your transaction really go through? Print the transaction receipt and keep it with your records until it shows up on your personal site and/or your bank statement.
Source: Bankrate.com
