June 11th, 2016 – A generation ago, nobody would have thought people could apply for mortgages online, compare deposit rates over the internet or pay their bills using a smartphone. A generation ago, the internet was just getting started publicly.
But as technology has advanced and consumer acceptance has broadened, those and many other once-unthinkable financial practices have become routine. Are safe-deposit boxes the next things to go digital?
Probably not, at least not entirely. Many people still will find bank safe-deposit boxes good places to store tangible valuables such as rare coins, jewelry and heirlooms. But to the extent traditional safe-deposit boxes are used to protect important documents, they could be headed for obsolescence.
Most Americans already store documents on desktop computers at home, tablets or phones. Boston-based Fidelity Investments has gone a step further by unveiling a broad, secure document-storage service called FidSafe. It’s a free online tool and one that can be used by any U.S. residents 18 and older, including people who aren’t Fidelity customers. (The program, however, is available only in English.) Accounts may be closed at any time.
“There’s no fee, either for Fidelity customers or non-customers,” said Dan Brownell, president and CEO of a Fidelity company called XTRAC Solutions, which is operating the service. “We believe something like this is very useful and doesn’t break our bank to provide it.”
FidSafe account holders might desire to do more business with Fidelity as a result of using FidSafe, so the program could help retain or attract customers, but Brownell said further business relationships aren’t a requirement.
The company also vows not to serve up targeted online advertisements based on the types of records a person stores. That’s partly because the data are encrypted so the information isn’t accessible to FidSafe staff (except to meet legal requirements) or other third parties. For example, Fidelity says it won’t be pitching you mutual funds based on what you hold with another company.
All types of documents and records can be stored on the site — not just brokerage or bank statements but insurance policies, income-tax returns, home-title papers, birth and marriage certificates, wills and trust papers, alimony/child-support documents, health directives, credit reports and passports.
There are many reasons why a service like this could come in handy.
Suppose a flood or wildfire forces you to evacuate to a nearby high school gymnasium. If so, you could use the service to check your homeowners insurance policy, without having to paw through your file drawers at home. If you happen to apply for a job, you could download your Social Security number and reference list remotely — or produce a digital copy of your college diploma. If your wallet gets stolen while you’re traveling in Paris, you could download a copy of your passport.
“People like to have copies of important documents when they’re traveling overseas or if they feel the paper originals would be at risk,” Brownell said.
Traditional safe-deposit boxes come with various drawbacks too, especially if you need quick access. Boxes are available only during regular bank hours, and a box could be damaged or off-limits if the branch itself has been deluged by a flood, destroyed by an earthquake or burned in a fire. A physical box also might cost you a fee to rent, depending on your bank, and the contents aren’t protected by deposit insurance (though they might be covered by your home-insurance policy).
And if someone else needs to locate your will, health-care directive or something else stored in a safe-deposit box, they won’t have quick access unless you arranged for it ahead of time.
Similarly, you could still maintain copies of important paperwork on a home computer or smartphone, but there’s a good chance those options are less secure, especially phones, which can be lost, stolen or dropped into fish tanks. At a minimum, a service like FidSafe can serve as a smart backup plan.
The service also could encourage family conversations and planning around financial topics. In a survey of its customers, Fidelity found that fewer than half knew where all their most important papers are located. The survey also indicated a lot of households don’t discuss this issue, and many people store important documents in paper form in places that, while secure, can’t be easily shared or located by others in a pinch.
With FidSafe, users have various ways to share key documents with a trusted relative, friend or adviser. In fact, owners can arrange to pass on documents to a beneficiary, spouse or other appropriate party upon the owner’s death. “It’s a trusted service that allows a sharing of information,” Brownell said.
Documents can be transmitted into the system in various ways, from uploading computer files or scanning papers to taking photos and sending them over. The FidSafe.com website includes various instructions and a lengthy question-and-answer section. Participants will be able to store up to 5 gigabytes of data, which Fidelity considers more than ample for general purposes.
Other document-storage services are available, including those geared to wills, trusts and other estate-planning papers. But Fidelity’s long history, solid reputation and willingness to serve non-customers might give it an edge. The company administers $5.3 trillion in assets and has been around for nearly 70 years. To my knowledge, this is the first time such a large financial entity has provided a service like this to non-customers and customers alike, free of charge.
Article found here.