It isn't an exaggeration to say that most people who pay bills and have bank accounts in the United States have seen at least a decade's worth of paper inserts and online popups encouraging paperless banking and online bill pay. Whether the marketing and graphics in our mailboxes, e-mail boxes and on the Web sites we visit make an appeal for saving trees and going green, or they paint a picture of a simplified life without paper, stamps and waiting in line at the bank, most of us have been given many chances to ditch the print for online.
Why, then, is the push for paperless banking still so prevalent? Banks save gobs of money when customers opt to stop getting paper statements and other pieces of snail mail through the post office -- by some estimates it can cost at least 75 cents to more than $2 per printed bank statement, but fewer than 40 percent of individuals who bank online choose to go all the way and get their statements electronically [source: Pulliam Weston].
People worldwide have come to love ATM machines, direct deposit, and online and software-driven financial management programs, but many who have gone mostly paperless do so with a backup: They still get paper copies of transaction histories and monthly statements. And as many as 30 to 40 percent of people with Internet access don't use online banking at all [sources: Pulliam Weston; Reinwald; Todorova]. Is the message from banks leaning too much into green guilt by making people feel bad about their paper? Or are people holding out as much as possible to keep control of an institution built on paper and people?
Two things are certain when it comes to going paperless: Banks save money and customers save time. It is a partnership where both sides benefit, but banks seem to get the most financial rewards. And not all customers want to drop paper for virtual banking. Even if it saves time and streamlines recordkeeping, it isn't something you can put your hands on and file in a tangible way. There are even murmurings that people could be charged if they want to keep banking with paper, and some institutions already force the issue by requiring direct deposit. In 2011, the U.S. government began phasing out paper checks for welfare and Social Security payments, just one step in shaving $120 million off of costs [source: Hauser].
So should banks be doing more to help you go paperless? Would you make the switch if they did? Next, we'll look at how banks can help you keep a handle on your money without actually having your hands on the money.
Mind Over Paper
If you have any fears or reservations about banking online, friends and family can share positive experiences and urge you to make the switch, but your bank may be the best place to find reassurance about going paperless. Financial institutions have spent vault-loads of money building networks and systems to handle customer transactions and they know how quickly they can lose their reputations and clients if security is breached.
Most bankers are more than willing to talk with you about the technology on the back end -- the encryption and firewalls their customers deserve. It is the right of every customer, from the small savings account holder to the corporate CEO to know what kind of lock is on the safe. Asking specific questions about how they protect your money may help ease many fears about how -- and how often -- people who bank online lose money.
Banks can help you by explaining security and equipping you to use the best practices for safe online banking. Sitting down with a bank representative is well worth the time if you need some reassurance about virtual money management. Most customer service specialists can walk you through setting up the best passwords, watching out for scam Web sites or fake landing pages when accessing information, and selecting and setting up home security to keep hackers and viruses at bay.
Better yet, banks can help you go paperless by giving you the confidence to take advantage of online banking without fear. Most financial transactions happen in the virtual or online world already -- and have for a long time -- but customers have had paper to connect their activities with what happens "at the bank." Letting go of some of the paper actually can improve security because there is less of a paper trail with your personal information. Your online information already exists there as an account holder with any computerized institution, and it has, for the most part, been much harder to get to than paper records.
Once you achieve mind over paper, how can you wrap your head around paper-less filing? We'll look at how a folder is just a folder, whether it's paper or not, next.
Paperless Filing Tools
Paperless doesn't mean recordless, but keeping electronic files is a lot different from filing paper. Most every financial record viewed online or in an e-mail can be saved to a folder on your computer. Many bank and investment Web sites make it clear with icons on pages you're viewing that you can print the record or e-mail it, but it isn't always clear that the print option isn't for paper only. Using the "save as" function allows you to choose the file type when you're saving it to your computer. Saving as a PDF or PNG file, for instance, creates a viewable file of a financial record, statement or single transaction.
Banks do a commendable job of providing instructions for banking online, but they don't give much information on what to do with your files and records once you take save them from the bank's Web site. Financial management software and online budget tools have file systems in place for pulling records from companies you do business with, and they make it simple to store by month, type of expense or budget. QuickBooks and Mint.com are two of the most well-known services for helping you manage files and finances. If you want to do it on your own, however, you are really on your own.
Setting up folders on you computer by month, quarter and year is one way to start, but keeping those folders up-to-date and complete depends on how well you utilize what banks do offer. Sign up for e-mail notices or set your calendar to review transactions on a regular basis, keeping an eye on expenses, fees and any overcharges. Pay attention to statement notices and go over the actual statements you receive. Simply moving the file to a folder without reviewing it is a little too easy. Online banking and storage saves time, but it shouldn't replace the time you spend tracking and reconciling your budget.
Files online should be kept just as long as paper files, about seven years seems to be a general recommendation, and keeping the files doesn't have to mean keeping them on a hard drive. Using portable storage devices to move folders is simple and gives you the opportunity to back up information in a secondary place. Password-protecting all of the data and making a plan for giving others -- family, friends or trusted advisers -- access in case of an emergency also adds peace of mind. Often, files are small enough to just keep them on your computer, but remember to back them up regularly. Banks do allow access going back months or even years, but having ready access to files you need -- when you need them -- may be easiest when they're on your own system.
And avoid the temptation to print all of these files. Even the IRS accepts electronic files, so keep the paperless banking paperless, but don't worry about being recordless. It's all there in print, just not on paper.
Paperless, Not People-less
Back in the day, it was expected that a person would answer the phone at a place of business and help you with your questions. Automated phones with prompts started replacing real people, and customers just had to adapt to this new era of customer service. Some corporations have such poor customer service that they're known for being places where it's nearly impossible to "get a person on the phone" to help with a problem. This is one area banks could focus on in order to help you go paperless.
Gaining a reputation for having people in place when it matters most -- for example when you just can't locate a statement or receipt and you have a large shortfall in your account that you can't explain -- might increase customer satisfaction so more people might be willing to let go of paper. Treating customers well and generating word-of-mouth advertising is a very people-centered approach and it may seem to go against the idea of paperless banking, but perhaps banks can help customers most by having enough people in place to support the lack of paper. Whether for troubleshooting technical difficulties online or attempting to get a printed record for tax purposes, sometimes banking by yourself just doesn't cut it.
Making face-to-face contact once in a while helps, too. Some individuals, maybe older generations more than the younger, need reassurance about their money and holdings. Many seniors have had decades of frequent contact with tellers. Even when nothing is happening with an account, for instance when a fixed-income electronic credit or payment is just about all that's going into a person's checking or savings, sometimes touching base is important. Accounts matter to banks and letting people know that they matter, too, is often a lost art on the part of the bank.
Banks can -- and really should -- staff and serve paperless customers without becoming known as people-less or for caring less about their people. And one way they can stay connected is to provide numbers to call and e-mail addresses to contact in times of need. We'll look at other forms of support, next.
Paper Tools and Apps
Going paperless can still include a little bit if paper, or maybe, some good, recycled cardstock. At the start of the article, we mentioned sitting down with a banker to begin the switch to online banking, and it would seem a little empty to walk out of the bank armed with nothing but a head full of numbers, passwords and a Web site address. Banks can continue their marketing push to paperless bank by crafting some ready-reference helps that people can hold in their hands.
Having a pamphlet with instructions for logging on and reminders about passwords -- without the actual passwords printed anywhere, of course -- gives you just enough information to fall back on if you can't access an account or need to troubleshoot the bank Web site. Just as you record numbers to call for lost or stolen credit card and keep "in case of emergency" files for access to important papers or instructions as needed, having a backup plan for electronic glitches also gives peace of mind. Banks can and should help you manage and access your money even when the system goes down or you simply can't remember how to get started.
Having an app or staying in touch with e-mail tutorials and financial management tools and tips, for example, is another way banks can support customers as they let go of their paper files. An extension of online banking into app-based check deposits is just one way banks are supporting customer needs outside of the desktop and laptop.
Getting all of this for free would be great, too, and you can if you shop around and see what the banks will offer you by agreeing to forgo the paper statements. Cutting out the paper saves the banks money, but this doesn't always trickle down to the customer. At the very least, it shouldn't cost you to make the switch from paper to paperless. Whether it benefits in a monetary or interest-earning way will depend on the institution and your banking needs, among other factors.
For many who make the change, however, convenience and de-cluttering are payoff enough.
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