As the world has turned digital, so has the banking world. Most of us now run our day to day banking on our phones via a banking app. Banks have had to increase their security to help combat fraudulent activity, as new banking apps are designed to be accessible to the customer so that they can transmit their transactions very easily without the need to visit a branch. For this reason, insurance services have developed a level of cover that protects us against the loss of money. However, let’s see below if our money is actually safe in the first place and how it affects some aspects of finance.
In simple terms, asset finance is when businesses pay a monthly agreed amount to a finance house in order to grow their business by buying the equipment they need for growth. This is mainly done through leasing or hire purchase agreements so that companies know the amount that they are borrowing and can budget accordingly. In regards to safety, as this is a loan agreement, the amount that is taken is usually just the amount that is required for the equipment so there really is no risk related to money being left in a bank account. It is also worth noting that because these agreements are in place to buy assets, there is always some value to the products being bought, so the risk is relatively low.
Business finance is slightly different to asset finance as there is more than one product available to businesses. Business finance can come in many forms such as a loan, an overdraft, a company credit card or other financial investment which helps your business to grow. There is no need to buy a particular product or service with your business finance, you can pretty much use it for anything that’s related to expanding your business and therefore you have a good degree of flexibility with this money. Business loan finance is relatively safe as it is sent to be used for the business and therefore will usually be earmarked for spending. However, in terms of credit cards, these are open to misuse so make sure that any credit cards are secure and insured correctly.
As mentioned previously, personal banking is now easy to access via your mobile phone or tablet. This increased criminal activity has meant that your online banking system was relatively easy to access. Even the way in which we pay for goods has changed with the advent of chip and pin and contactless payment and this has made personal banking more of a risky business. For this reason, insurance companies have provided us with more ways to ensure that we have the cover that we need for when an incident may occur.
Below are some types of insurance which are available to protect you against risks:
- Marine cargo insurance: marine cargo insurance is offered by many insurance companies. It covers many different aspects of business and provides cover against damage or loss of stock, protects equipment and loss of earnings due to theft. As this is for marine cargo, it covers you worldwide so that you have some peace of mind when your business is trading internationally, as the risk of money loss increases as your business grows and expands and therefore there is more at risk. Although this insurance doesn’t necessarily make your money safer, it does help to cover any losses that may occur.
- Travel Insurance: travel insurance provides exactly what it states, it covers you whilst you are travelling, in most cases, you are covered for medical purposes and loss of documents whilst abroad. However, it also covers you for any loss of money i.e. cash and in some cases, it can also cover credit and debit card transactions. Although most banks cover this type of fraud, many travel insurances also offer this level of cover in the event of this kind of loss. There are now new ways in which we can pay for things abroad and these minimise the risks related to your money. With travel insurance you gain some peace of mind in the event of a loss.
- Banking Guarantees: the world is driven by Visa and Mastercard when it comes to payments, whether it is credit or debit card, these are the most popular methods of payments across the world. For this reason, most banks offer to cover up to a certain amount to protect against fraudulent activities. This amount is governed separately to the banking institutions and will still be paid or covered even if the bank goes bust. You will be covered up to a specified amount so if the amount of money you have is less than this specific amount, you will be covered against it all. If, however you have more money that the specific amount, you will only be partially covered. The specified amount depends on the country that you live in and the specific laws of your country.
- Cash: cash has become a means of payment that’s not as popular as it once was. We currently have more transactions that are made by cards rather than cash. The risk of cash remains to be greater as it can be stolen more easily, even though there’s all kinds of ways for thieves to steal in other ways as well. If money is taken from your bank account this can be seen straight away. If, however cash is taken from you, it is hard to prove the amount that you had so having a loss is greater. It is also worth pointing out at this point that if you have any form of insurance that covers cash such as home insurance, you may only be covered up to a certain amount.
We have outlined how safe your money is but you can never make your money 100% safe. if you take the insurances that we have mentioned into account, they do go some way in protecting your money to a better degree and keeping more funds in your wallet rather than someone else’s!