"Barney's First Car" and Use of Bank Technology

January 23rd, 2018 by James Atkinson

We all love "The Andy Griffith show". I bet a lot more folks have watched that show than any other reality show and folks just keep on watching it. The show is "reality" and no matter the episode, there is a lesson to be learned.

The episode on "Barney's First Car" reminds me of the subject matter of technology and banks and associated risks (a subject so far ranging, to do it justice, it would take for more than one newsletter or presentation).

In the episode, Barney points out to Andy that the car is one of the two biggest purchases he has ever made, the other being a septic tank as an anniversary gift for his parents. Barney mentioned his excitement over the gift as it was something his parents needed and had "tons of concrete - all steel reinforced". Yet, Barney failed to have his other big purchase in life, the car, checked out by Wally the mechanic to make sure all was in order thereby causing himself a lot of money, grief, and embarrassment.

To keep this subject matter within very narrow confines, I will limit my discussion to a few summary points that could pay off big for your financial institution.

  • Electronic communication such as email is one of the chief methods by which folks communicate today. However, it is not permissible to send out confidential bank customer communication in a non-secured email format. Even the fact that someone is a customer of your bank is nonpublic information. Are your employees being continuously trained on the confidentiality of customer electronic communication?
  • Institutions subject themselves to potential large losses daily because basic wire transfer protocol is not followed. Banks have lost huge sums of money because of failing to adhere, without exception, to customer callback verification processes on wire transfers, even of a recurring nature. Institutions have also lost money from lack of proper policies, procedures, and contracts with wire customers which have been reviewed and approved by legal counsel.
  • Upcoming Regulation CC changes will have impacts on bank liability regarding remote deposit capture and accepting deposits by mobile phone.

Bottom line, don't be like Barney. Have Wally check out the car and make sure to the extent possible you always have "tons of concrete- all steel reinforced" and check out to the extent possible relative to current technology risk and future technology risk you are buying from a seller before implementation.