Security Between Traditional Banking and Online Banking

by Neil Kokemuller
The physical presence of other customers contributes to in-bank security risks.

When you sign up for a basic checking or savings account through most brick-and-mortar banks, you can access both traditional and online banking services. Each format has benefits, such as a personalized in-bank experience with brick-and-mortar banks and the convenience of online banking. Each also carries some level of security risk for customers.

Online Consumer Data Risks

A major concern of traditional bank customers is the exposure of bank account information to online hackers. If you log in to your account or make online purchases with a card, you potentially expose yourself to hackers, who can steal your identity and your money. A strong anti-virus protection program, encrypted wireless network and private-use computer all help with financial security. Additionally, many banks and online retailers constantly work to upgrade their security tools to stay ahead of would-be hackers. However, some level of risk is always present regardless of any security measures.

Bank Data Centers

Traditional banks aren't immune to electronic hacking. A Business Insider article at the time of this publication noted that many large banks maintain their customer and financial data in large data centers. Bank data are often as easy or easier for hackers to access than individual online customer accounts. In fact, some hackers prefer bank data centers because they provide access to hundreds or thousands of customers' data in one place. Thus, you face some level of risk whether you bank online or in-store.

Traditional Bank Security Assessment

Using assisted transactions in a traditional bank naturally minimize some security risks because you don't perform online transactions. You also benefit from physical security in that banks use vaults to protect cash, and large banks often have security guards to help with physical protection of customers. Of course, banking in-store could potentially expose you to the presence of an armed robber. Also, some thieves use phone apps and electronic swiping devices to access customer card information through wallets or purses. Most of these risks, however, are generally less potent than those of online banking.

FDIC Protection

One bit of good news for all bankers is that the Federal Deposit Insurance Corporation protects up to $250,000 per depositor per bank for member banks. This protection exists with many online banks, as well as traditional banks. You need to check with your bank or use a search tool available through the FDIC's website to see whether a particular in-store or online bank will guarantee your assets' security.

About the Author

Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.

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