Trust&Protect Part 1: Comfort in the US Banking System
- Pete Boergermann
Trust&Protect is our 4-part guide to financial safety designed to provide you with peace of mind in times of uncertainty. In this first part of our series, we focus on the US Banking system to give a clearer picture of the role banks play in keeping your money and personal information safe. We’ll address why your money is secure when deposited in a bank, the cybersecurity precautions that are standard throughout the financial industry and how banks are prepared for emergencies.
By now, you have likely heard the term “Member FDIC” accompany bank ads on the radio or tv or noticed it on printed signs in your local bank’s lobby. There is also a good chance that you have heard it so often, you tune it out as background noise without ever questioning its meaning. Truth be told, that phrase does a great deal of heavy lifting when it comes to protecting your money.
FDIC stands for Federal Deposit Insurance Corporation, which is a government entity whose purpose is to insure deposits made at a bank for up to $250,000 per depositor, per FDIC-insured Bank, per ownership category. What this means for you is that every dollar you deposit into an FDIC-insured bank will be guaranteed if the bank meets a disaster or collapses for any reason, up to that $250,000 per depositor, per ownership category threshold. The FDIC was formed in 1933 and, to date, no depositor has lost money at an FDIC-insured institution. This is a level of protection that is not available outside the banking system, so the next time you see “Member FDIC,” it should serve as a reminder of how secure your money is when you deposit it in the bank.
Because money is such an important asset in people’s lives, the threat of criminal attacks against banks has been around since the financial industry was established. This constant threat has not changed despite our currency becoming more digitized through mobile and online banking platforms. As business accessibility moves toward a more virtual atmosphere, it’s important for banks to always stay a few steps ahead of cyber criminals.
It is universal throughout the entire financial industry that banks devote a large amount of resources to cybersecurity. Jobs and even entire departments whose primary goal is to neutralize the threat of cyber-attacks exist throughout financial institutions. As criminals find new ways to attempt to breach a bank’s infrastructure, information security jobs become more sophisticated in their efforts. These efforts include educating themselves as well as setting up trainings and providing resources that all employees of their organization are required to complete. It is also common practice for banks to share incidents with other financial institutions to help strengthen the industry as a whole, so that all banks can prepare and minimize disruption if similar cyber-attacks take place.
Banks are also subject to some of the most rigorous regulatory requirements in any industry. This means that your bank is required by law to meet a certain level of security or it could face stiff fines and penalties. For instance, the multifactor authentication to access your digital banking has been a requirement for financial institutions to force into their online platforms for several years. These regulations are all done in favor of protecting the customer’s money.
Many banks, however, go well beyond the minimum regulatory requirements. Providing customers with information, training and resources on cybersecurity is still the best way to keep criminals at bay. Because education is the first and most important piece of thwarting attacks, there will be no shortage of resources from your bank on how you can help protect your information.
Most banks also have stringent internal policies regarding their preparedness for emergencies and disasters. These often involve committees who meet on a regular basis to discuss scenarios that may disrupt their organization’s functions and how they will be able to react to the crisis. A perfect example of this took place during the COVID-19 pandemic. While the pandemic came as a surprise to the general population, most banks have had a pandemic response plan in place for years. Because of these annual preparedness plans, most financial institutions were able to swiftly put their plan into action and continue to provide their essential service without missing a beat. So, if a disaster does occur, you can rest assured that your bank is prepared to respond in kind.
Because US banks are insured, prepared against cyber-attacks and practice for emergencies, uncertain times are exactly when you need your bank the most. Look for ways that you can keep your information safe online in part 2 of our Trust&Protect series.
Pete Boergermann joined C&N in 1998. In his role as the Director of Information Security, he is responsible for managing the information security program at C&N, while also championing IT security to make it a critical part of C&N’s business operations. Pete has previously served as Information Technology Manager/Information Security Officer.
A United States Air Force Veteran, Pete graduated from the BAI Graduate School of Bank Operations through Vanderbilt Owen Graduate School of Management in 2006 and completed the Pennsylvania Bankers Association’s (PBA) School of Banking in 2009. He earned his credentials as a Certified Information Executive from USC Upstate Campus’s Institute for CIO Excellence in 2016. He also puts his expertise to valuable use as a member of the PBA IT Technology Committee and Chair of the PBA Cyber Sub-committee.
In his spare time, Pete serves as a School Board Member of New Covent Academy and as an Elder at the Church of the New Covent and volunteers for Susquehannock Trail Performance Rally and the Annual Laurel Classic Mountain Bike Challenge. He lives in Wellsboro with his wife, Cassie, and has three daughters, Alyssa, Joy and Mikaela.