I recently logged into my U.S. bank account, Bank of America, and I noticed they are promoting online banking as a safer way to get statements than offline paper statements, as seen in this screenshot from their site:
Banks have always emphasised speed and convenience as key benefits to online banking. Security, on the other hand, has been perceived as a risk, not a benefit. Banks, brokerages, and e-commerce sites all had to work very hard to convince people that online transactions are safe. Now people don’t think twice about doing business online. On the contrary, people would be extremely upset if these online services were suddenly taken away.
So it’s interesting to see the internet being positioned as a security benefit, rather than a liability. This makes particular sense considering a conversation I had a few months ago with a senior banking executive who explained to me that cheque fraud costs the banks millions per year, meanwhile their losses due to online fraud are negligible.
Clearly, it’s much easier for banks to prevent, monitor, and trace security tampering electronically when all your transactions go through computer systems that they maintain. The same holds true for storing your sensitive business data. If your financial data is stored on your computer’s hard drive then having your computer stolen is both a serious security risk and a business liability – there goes all your data. You have similar problems if your hard drive dies. If you mail files, electronically or through the postal service, it’s very easy for somebody to intercept that data. On the other hand, it’s virtually impossible to intercept your data when you login to an encrypted site like your bank or like Xero.
When you think about it, it’s obvious. Online is safer.