In recent years, the technology industry has drastically changed banking and brought with it some truly incredible advancements. Banking is one of the world’s oldest businesses, and eventually it was time for a change. The first practice of banking was found in Ancient Babylon where farmers offered grain loans to transport goods between towns. In the 14th century, Italy recognized banking and made it what it is today. The oldest active bank (Monte die Paschni di Siena) was founded in 1472.
Until about 10 years ago, banking was widely viewed as a slow-moving industry. Today, financial institutions are investing billions to remain relevant and competitive in the fight for consumers. Thanks to technology, 21st-century banking has taken the world by storm.
Long Lines? Not Any More
Years ago, if you wanted to withdraw money or deposit a check, you would wait in long lines at the bank over lunchtime or on a Saturday morning to do the simplest things. With almost every aspect of banking moving online - that just isn’t necessary anymore. It’s possible to view balances, deposit checks, and send money directly from the device in the palm of your hand. From simple transactions, to applying for a credit card, technology has made it possible to do it on your own time.
A study completed in 2023 found that 98% percent of Millennials used their mobile banking app to do tasks such as deposit a check, send money or view their balance. In contrast, only 69.5 percent of baby boomers had used a mobile banking app.
Tap, Tap, Done
The American Bankers Association determined 87% of debit cards were projected to be contactless by the end of 2022. Contactless cards have a small embedded chip that emits a short-range radio wave to the payment terminal. It’s often referred to as “tap-to-pay”, but no tapping is actually required. Placing the card a few inches from the terminal will complete the transaction. Contactless cards are made to be safer and more secure than swiping the card and entering a PIN code. Much like the chips in new debit cards, contactless cards create a one-time code for each transaction. The code is sent to the payment terminal with your account number in less than a second, and oftentimes no PIN code is needed. This reduces the risk of someone peering over your shoulder and memorizing your code.
The biggest security problem with contactless cards is the physical possession of the card. No PIN or signature is usually required, so if your card is lost or stolen, anyone with the card in their possession may be able to use it for an in-person transaction.
Apple Pay and Google Pay have become popular payment methods around the world, allowing users to store their cards on their phones. Much like contactless cards, after a user chooses the card within the app, they “tap” the payment terminal with their phone. As long as you have your phone, your cards will always be with you.
Cybersecurity Risks Have Been Enhanced
With the majority of banking moving online, the risk of cybersecurity breaches has increased. The most notable financial breach was in 2017 when Equifax had 143 million accounts compromised by a data breach. Users’ personal information such as phone numbers, addresses, names, and credit card numbers were all stolen by hackers. The financial services industry was impacted by 62% of the data breaches in 2019 with an average cost of $18.3 million annually per institution.
When accessing your private information, be sure to not use public access WiFi and always log out of each website once you’re finished. Easy passwords, public computers and phishing are some of the most common ways hackers will gain access to financial services accounts.
Technology is Planting Roots
Technology is constantly changing how the banking industry operates, and the industry has seen as many changes in the last 15 years as there were in the first 500+ years. Online banking and mobile financial applications have made it easier for us to send money, deposit checks, monitor balances and much more.
At Nebraska Bank, we are working every day to find innovative and creative solutions for our customers to manage their accounts with ease. With 9 locations across Nebraska, we’re planting our roots within our communities to better serve our customers every day.
Other banks have branches, we have roots.