April 20, 2020

consumer news

FEDERAL DEPOSIT INSURANCE CORPORATION

Now is a great time to learn more about 

digital banking, in times when face to face 

interaction is unavailable or households 

need to change the way they conduct their 

finances. Technological advances in the 

ways we obtain credit, make payments, 

and manage money can provide convenient 

ways to access some financial products 

and services that no longer require going 

to a physical bank branch. These “brick 

and mortar” banks, a term used to denote 

a bank branch located in a building, were 

once the only option we had. With digital 

banking and mobile banking now widely 

available and even newer technologies on 

the horizon, you might be asking, “Is it safe 

for me to take the leap to digital banking?”

So what is digital banking? The 

key features of digital banking are 

affordability, convenience, and instant 

access to information. These features 

help consumers understand their financial 

standing in real time, as well as plan 

for long-term goals and unexpected 

emergencies. Whether your bank has 

Is Digital Banking for Me? 

physical branches or not, online and 

mobile banking enables consumers to 

manage their finances remotely from 

anywhere, including depositing checks, 

transferring money between accounts, 

and even paying friends and family 

electronically through peer-to-peer (P2P) 

payment platforms. The October 2019

issue of Consumer News provides helpful 

information about protecting yourself 

when using online and mobile banking 

technology. Some banks, known as onlineonly banks, have opted not to provide a 

physical location at all.

The FDIC provides insurance for the funds 

that you deposit in FDIC-insured banks. This 

means that, if your FDIC-insured bank fails, 

the FDIC will protect you against the loss of 

your insured deposits whether the bank 

is brick and mortar or online-only. For more 

information on FDIC deposit insurance, visit 

https://www.fdic.gov/deposit/.

Depositors in FDIC-insured banks also 

benefit from other consumer financial 

protections. State and federal regulators 

supervise banks to protect consumers from 

certain practices, including those involving 

overdraft fees and correcting account errors. 

For more information on consumer financial 

protections, visit https://www.fdic.gov/

consumers/assistance/protection/index.html.

What do brick and mortar banks offer?

In addition to traditional banking services 

like depositing money and withdrawing 

cash, brick and mortar banks locations 

generally offer services such as providing 

money orders and notarizing documents, 

which involve an in-person interaction with 

a teller or other bank employee. Many brick 

and mortar banks also offer safe deposit 

PHOTO: GETTY IMAGES

Choosing the 

best options for 

your finances
For more help or information, go to www.fdic.gov or 

call the FDIC toll-free at 1-877-ASK-FDIC (1-877-275-3342). 

Please send your story ideas or comments to Consumer Affairs 

at consumeraffairsmailbox@fdic.gov

boxes, which customers can lease for storage 

of valuable items. It is important to note that 

the FDIC does not insure the contents of safe 

deposit boxes. 

Many brick and mortar banks also offer 

online and mobile access to their banking 

services, which their customers can use to 

manage their money online. Contact your 

bank or check their website to learn about 

all of the services it provides.

What does digital banking offer?

Banks that offer online and mobile 

banking services give you the ability to 

do some or all of your banking on your 

computer, tablet, or smartphone. These 

digital banking services might include 

transferring funds, depositing checks, 

viewing account statements, and paying 

bills. Some online bank services allow 

you to open deposit accounts and apply 

for loans, tasks that once required a visit 

to a physical location. These options 

may streamline the exchange of loan 

application information and may lead 

to faster loan decisions. Some banks 

also provide budgeting tools to help you 

manage your finances. 

To use digital banking services, customers 

typically sign up and create account 

information that enables you to access your 

accounts on the web or mobile device. Check 

with your bank to find out what digital 

banking features they offer and how to sign 

up for them. It’s also a good idea to make 

sure you know how your bank is protecting 

your digital banking data. Read more 

about keeping your data safe in the special 

Cybersecurity Edition of Consumer News. 

Online-only banks do not have a physical 

presence, so customers open accounts and 

access financial products and features through 

a website or an app on their computer or 

mobile device. You can generally use debit 

cards at ATMs to take out cash and deposit 

checks. In some cases, you can also make 

payments electronically. Some digital-only 

banks do not accept cash deposits, and there 

may be a fee for certain transactions, so be 

sure to verify that the features they offer meet 

your needs. 

Like traditional brick and mortar banks, 

digital-only banks generally have a customer 

service department that you can contact to 

ask questions, get help with transactions, and 

address other concerns or issues; however, 

they do not offer an option to meet in person 

with a customer service representative. If 

services can be conducted online or over the 

phone instead of in person, they generally 

offer many of the same services as a brick 

and mortar bank. 

Is it a legitimate bank?

Before engaging with any bank, whether 

it is digital-only or brick and mortar, it’s 

important to make sure you are working 

with a legitimate FDIC-insured bank. Make 

sure it isn’t a fraudulent website set up by 

criminals to mislead and entice people into 

transferring money or disclosing personal 

information for use in committing identity 

theft. To confirm that a website belongs to 

an FDIC-insured bank, check the FDIC’s 

online database, BankFind. BankFind 

includes both digital-only and traditional 

brick and mortar banks.

What’s best for me?

Brick and mortar banks provide the 

opportunity to build a personal relationship 

and have personnel who can go over loan 

terms or address account issues in person. 

This relationship is important to some 

consumers, and others may simply like 

knowing the bank has a physical presence 

and commitment to their community. In 

some circumstances, banking online or 

on a mobile device may not only be a 

convenience, but a necessity when face to 

face interaction is unavailable, even if it is 

only temporary. The bank that’s right for 

you might be brick and mortar, online, or 

a bit of both. The best news is that options 

are available to access your money and keep 

your funds FDIC-insured.

For more information on digital or mobile 

banking visit: 

FTC at https://www.ftc.gov/news-events/

media-resources/consumer-finance/

financial-technology

FDIC at https://www.fdic.gov/fditech/

and https://www.fdic.gov/consumers/

consumer/news/october2019.html