From SUVs to soft drink sizes, burgers to investment portfolios, the “bigger is better” mentality is widespread in the U.S. Big banks definitely want top jump on that bandwagon, using big marketing budgets to convince consumers like you that their brand is not just bigger, but better and more secure than a community bank or credit union, but that’s not quite true.
The truth is, smaller banks employ the same types of safeguards the big banks do, such as issuing your checks with multiple layers of security features and protecting their online banking systems with cybersecurity tools.
Community banks and credit unions have all the same protections
Both megabanks and community banks are insured by the FDIC, meaning the federal government protects the money you deposit there — up to $250,000. Credit unions are similarly covered by the National Credit Union Administration (NCUA) Insurance Fund. Federal regulations require all banks to be insured this way, so the level of insurance you get at a community bank or credit union is exactly the same as what megabanks offer.
Chip and PIN technology is another security measure that big banks and community banks have in common. In the last quarter of 2015, American payment networks implemented new rules that require businesses to use card readers that can read chip-enabled debit and credit cards — or assume liability for fraud if they don’t. Both large and smaller banks, as well as other card issuers, have all gotten on board by issuing new credit and debit cards embedded with the high-security microchips.
People want to bank locally — and there’s no reason not to
A survey by Kasasa found that two out of three consumers say they would rather bank at a community bank than a big one. With community banks and credit unions offering security that’s comparable to that of the big banks, what’s stopping you from switching banks?
If you need a bit more convincing, consider this: personalized customer service is the hallmark of community banks and credit unions. In fact, Kasasa’s Consumer Banking Insights Study found 64% of banking Americans feel community banks and credit unions deliver better customer service than big banks in any type of interaction, whether it’s face-to-face, over the phone, or online.
That personalized relationship can be an added layer of security in itself. A community banker who knows you and your spending habits may quickly notice when an unusual transaction occurs on your account. And if you ever do have a problem, you can count on that relationship to get you speedy, effective, and personalized help.
Financial institutions of all sizes have the same basic measures in place to protect your identity and security, and some go the extra mile. It’s up to you to do the research to find out which bank or credit union is best for you.