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How Technology Makes Banking More Efficient

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  • 0:09 Online Banking
  • 1:26 ATMs & Debit Cards
  • 2:06 Electronic Communications
  • 2:52 Electronic Transfers
  • 3:21 The Downside
  • 3:52 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
If you've ever heard the cliché 'banker's hours,' you know that banking traditionally has not been a fast and efficient process. In this lesson, you'll learn about how technology has improved the efficiency of banking for customers.

Online Banking

Meet Calvin, a customer of Your Town Bank. Calvin is pretty loyal to his bank and uses it for most of his financial needs. He has his checking and savings account at the bank, as well as his IRA. His car loan is through the bank, and he is working on getting final approval on a home loan, too. Lastly, he even uses the bank's credit card. Let's follow Calvin through an ordinary day.

Calvin wakes up, turns on the coffeemaker and heads over to his computer. He logs on to his online banking account, which provides account information on his checking, savings, IRA and credit card accounts. He can see everything that is normally shown on an account statement and can even print off a statement if he wants to do so.

Calvin sees that his paycheck was automatically deposited into his checking account. He confirms that the online account's auto transfer feature transferred 5% of his pay to his savings account. Calvin also notes that his credit card payment is due in 10 days but knows that it will be paid on time because he set up auto pay.

The bank will automatically transfer the payment from his checking account to his credit card account on the due date. In fact, Calvin has auto pay set up for all his routine bills. It saves on checks and postage and helps ensure he's never late on a payment.

ATMs and Debit Cards

Calvin decides to eat lunch with some buddies from work. Calvin has pretty much given up on checks and cash. Instead, he pays with his debit card, which automatically transfers money out of his checking account to make the payment electronically. He's even able to use the card to tip the waiter by penning in the tip amount on the receipt.

After work, Calvin decides to check out the art fair going on downtown. He stops off at an ATM to withdraw some cash because he knows many of the vendors don't accept debit cards. Calvin spends more time with an automatic teller machine than a human teller because of the convenience - he can get cash and make deposits 24-7. In fact, it's rare that Calvin even goes to his brick-and-mortar bank.

Electronic Communications and Apps

While Calvin is at the art fair, his smart phone beeps indicating a new email. It's from the bank, advising him that his quarterly IRA statement is now available to view. While he has a bank app on his phone that can give him the new information, he decides just to hit the link in the email and he is automatically sent to the log-in page. He logs in and happily sees that his account has grown in value.

Calvin arrives home and prepares dinner. After eating, he checks his email and sees that his loan officer wants his most recent pay stub. He logs onto his work website and downloads a copy of the pay stub as a PDF. He then emails the PDF to his loan officer. It'll be there for her tomorrow, which will help advance the loan approval process instead of waiting days for the traditional snail mail.

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