Why Is Fax Still Important in Financial Industries?

Discussing the Reasons Financial Institutions Still Use Fax

Analysts, legal experts, financial gurus, and many other authorities on the subject are quick to note all the benefits of using fax for sending and receiving documents. For members of the financial industry, in particular, the perks of using fax for certain far outweigh those of other types of communication. Because of that, businesses in the financial sector continue to use faxing and will do so for generations to come.

Ease of Use

Ease of use is one of the main reasons financial institutions continue to use fax. While traditional analog fax machines could be a bit cumbersome and tricky, that’s not the case with more modern fax solutions. These days, people no longer have to own a fax machine to be able to use this type of technology; sending and receiving faxes is as simple as communicating via email.

Additionally, faxing no longer requires waiting around to find out if the message actually went through and reached its intended destination. Senders now receive confirmations of receipt complete with the time and date the documents in question were transmitted. Not necessarily having to feed a fax machine one page of a communique at a time is certainly a boon as well.

Speed

Speed is a noteworthy reason to use fax, too. It’s one of the fastest ways to send documents thanks to internet and cloud fax services. Virtual faxing provides near-instant results as opposed to the extended time frames of traditional machines. Obviously, it’s far more expedient than snail mail or enlisting the services of a courier.

In the financial world, speed is often of the utmost importance. When transmitting tax documents, stock transfers, loan paperwork, and other vital items, being able to send and receive quickly can be essential. Even a small delay in documentation could lead to extensive problems.

Universality

Fax likewise offers a level of universality that’s not available with certain other forms of communication. As mentioned, people and businesses around the world continue to use fax. It’s the preferred method of communication in some countries with Japan being a prime example.

Furthermore, not everyone involved in the faxing process needs to have the same type of fax machine. They don’t even have to be using the same online or cloud-based fax platform. If a company is sending an online fax to an individual halfway across the globe who owns an analog fax machine, the documents will still go through.

In the event a business is sending a cloud fax to a company that relies on standard online faxing, there won’t be any issues. Do you need to scan a mortgage loan approval into your computer and send it to a client in the form of an email? It’s not a problem. Faxing works across different types of machines, platforms, operating systems, and even devices. You can receive a fax on your phone from an overseas company using an analog machine or send one from your laptop to a remote employee across town.

Compliance with Regulations

Regulatory compliance is another reason the financial sector depends on faxing. A long list of regulations applies to handling, storing, and transmitting financial documents. These come from the FDIC, the Consumer Financial Protection Bureau, and many other sources. They’re designed to protect consumers, financial institutions, and anyone else who might be affected by sensitive information falling into the wrong hands or not being sent or received as expected.

Regulations within the financial industry are only one factor to consider. Financial businesses’ clients are also bound to have specific regulations that apply to their respective fields. Several rules and restrictions for transmitting financial documents have been set forth by the legal sector as well.

Failure to comply with any of those regulations could render legal and financial documents invalid. At the same time, doing so could lead to fraud, theft, lofty fines, and many other problems. Fax helps keep financial institutions in compliance with both financial and legal regulations as well as other industry-specific laws regarding document transmission.

Added Security

Security is another significant aspect to consider. Hackers can easily intercept standard emails and use the information within for their own gain. Virtually anyone could head off financial documents sent through the mail, allowing sensitive information to be used inappropriately. On top of that, tracking down the culprit could be impossible.

Faxed documents feature end-to-end encryption, so they’re not nearly as vulnerable to fraud as those transmitted through other means. They’re not as likely to be intercepted by hackers, and if they’re hijacked or inadvertently sent to the wrong number, they can’t be read by just anyone. Only recipients with the proper keys have the power to decrypt faxed documents, making fraud highly unlikely.

Based on reports from the cybersecurity sector, 2018 holds the record for data breaches at more than 470 million. Still, well over 155 million sensitive records were exposed during the last year for which information is available, and the number is expected to climb during the coming years. Hackers tend to target financial information even if they take a roundabout approach. Faxing aids in keeping banks and other businesses as well as their clients safe from fraud.

Authenticity

We’ve already talked about the increased security and compliance faxing provides. Those factors also enhance the authenticity of financial documents. Documents sent via virtual fax are considered legally binding unlike emails and other items that could have been intercepted and tampered with.

That aspect holds true across all industries and countries. Loan documents, business paperwork, tax documents, and other items sent via fax will hold up in court, including those requiring signatures. As such, businesses that use fax don’t have to worry about transmitted documents being deemed fraudulent or invalid.

Professionalism

Over the years since fax machines became vital to the business world, people have come to expect companies to use them. In the eyes of the public, a company that doesn’t use fax may not be as official as it claims. People tend to be exceptionally critical when it comes to businesses in the finance industry. One that doesn’t have a fax number may be considered questionable.

Obviously, analog fax machines have their own phone lines and numbers. Without them, they wouldn’t function. Financial institutions are assigned designated fax numbers when using virtual fax platforms as well. They can reap all the benefits of faxing while also being able to supply fax numbers to clients, giving them the official, professional appearance the public is looking for. If necessary, they can have multiple fax numbers assigned to them.

Building Trust

All the elements we’ve mentioned are essential when sending and receiving documents particularly in the financial sector. While security, authentication, compliance, universality, and professionalism are all beneficial for financial institutions, they can also be used to build clients’ trust. Both businesses and individuals need to be able to trust the companies that handle their money. Knowing they can count on all those factors with a specific financial institution makes them more likely to choose that facility to do business with.

Greater Control

It’s also important to mention the level of control financial institution administrators have over fax transmissions. They’re able to choose which personnel have access to the institution’s faxing capabilities. Administrators can add new users and remove old ones as needed. They can monitor the documents being sent and received as well. Those abilities further improve security while also increasing accountability.

Improving the Client Experience

In addition to all those points, fax helps to improve the client experience. Financial institutions can send documents more quickly with fax, so clients are sure to receive them in a timely manner. On the other end of the spectrum, clients can quickly and easily transmit documents to banks and other members of the financial sector even if they don’t have fax machines. Those who don’t have fax machines on hand can still receive their documents, too.

With virtual faxing, clients don’t have to worry that their sensitive financial information could fall into the wrong hands and be used for unsavory purposes. They can rest assured they’ll be the only ones able to decrypt and read the documents they receive from financial institutions. Both financial companies and their clients have the added advantage of compliance and legal protection with faxed documents.

All that goes a long way toward improving client satisfaction. In turn, clients will pass along the good word to others rather than filing complaints and posting negative reviews. When consumers are happy with their experiences, everyone wins.

Holding True to the Faxing Tradition

There’s no denying that numerous communication options are available these days. Each one has its place in the business world, but most of them have certain drawbacks as well. Modern faxing technology offers a wide range of benefits for members of the financial industry along with their clients and third-party affiliates. Because of that, it’s clear that faxing will continue to be an integral component of the financial sector.

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