What You Need to Know About the Safety of Online Banking

Martin Saidler
Martin Saidler May 8, 2016

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How safe and efficient is online banking compared to brick and mortar banking services?

Martin Saidler, CEO and founder of Centralway, a company that develops mobile banking solutions, discusses the safety of online banking and the future of banks.

Follow Martin Saidler at: https://www.centralway.com

In the world of online banking what role do brokerage houses play?

Find out what Doug told a South African listener, who is planning to move to Israel, about how to handle his finances when making aliya.

Listen out for a link to an article explaining how to open a U.S. brokerage account from outside the United States and get some important advice about investing in Israel.

Watch Centralway on YouTube.

Read the Transcript

Interview with Martin Saidler

Martin Saidler, CEO of Central Way, discusses the future of online banking. Is it really safe to do your banking through the internet? And what does the future hold for banks?

Douglas Goldstein: Martin Saidler is the CEO and founder of a company called Central Way, which develops mobile banking solutions.

Many people do their banking online today and quite frankly they think it’s pretty cool. What needs to be improved?

Martin Saidler: We are developing mobile banking solutions and our main product is Central Way numbers, a mobile banking app. We made the decision to develop a mobile banking app because we’re not very satisfied with the existing solutions. What we have done so far, and this is from my perspective as well, are the main topics. What needs to be improved by banking is first of all it’s mobile. It’s not any more with the web. It’s not any more the browser. It’s your smart phone, what is the focus on your life and your whole personal finance you want to manage as well on your smart phone. And if you are thinking about banking, you are thinking about to make money transfers, to check your balance, to control your statement so that everything is going fine and to check if you are going into minus or not and this is exactly where the pain is starting. We developed an app which is easy to use and our focus here is really to achieve a simplified solution in which once you have linked your existing banking account to this, to our application, you have an automatic personal finance manager. That means, automatically every single transaction is categorized in certain categories. For example, clothing or travel, and there are many more. You don’t need to adjust it manually, but you can do it. You can check as well. One, you check your balance. You can check your balance not just for one current or saving account. You can do it for multiple accounts and you can aggregate all of these accounts in just one app. You see where you are standing and this is the goal. Our goal is convenience. Convenience, simplicity in just a very, very, very easy to use application, so you can manage your bank accounts as well your personal finance.

How Safe Is Online Banking?

Douglas Goldstein: What you are talking about is really bringing so much information, very, very private information about someone’s money situation on to his phone. But these days, people are very concerned about phone safety and not the least of which is the whole question of how safe the iPhone is related to the Apple case against the FBI. Do you really think that people should feel safe with so much information on their phone?

Martin Saidler: Yeah, they have two points. First of all we need to define what is safe. What is the difference between a smart phone and a PC or MAC? The last 10-12 years and even about 15 years, I don’t know anymore, I’m using eBanking in my browser. Was eBanking safe or is eBanking safe? Yes, it is safe. Nothing happened with my account in the last 15 years. Of course, there are examples where it was not safe, but I would say these cases are very minor in general in the last 15 years. And what is the difference between a smart phone, and this is where we are looking at the issue of a safe application and the concerns that you can lose your data. You can lose your information about your balance, account, and this is what we solved in a way.

First of all, we are not looking to replace the banks – not the security of the banks. On top of the existing bank account with your username, your password, your transaction numbers and pin codes, on top of that we have two additional security layers. One is the username and password and the second is the security pattern that you have to create and below that, you still have the credentials that you are using for your online bank account, it means twice the security, so double security. But there is still one thing. We figured out what is quite a risk and this is what is happening. If you lose your phone, your smart phone and even with the case of Apple, iPhone with the FBI, they could not track it down. Afterwards they tracked it with the support of Israel. But in the end, we made the decision that no data in our application is stored on your smart phone. That means if you lose the smart phone and it falls into different hands, no one will have access because they have no data. Everything is online in our safety secure data centers in a nutshell in the cloud. So that means even if you lose the phone and this is the most critical part in our analysis, the data is secure, even more secure than if you would use a smartphone where you are storing the data of your bank accounts. This is not in our case – exactly the opposite. Everything is stored in the cloud and this is where you compare online banking, the traditional eBanking solution with the smart phone. We are not just secure, we’re a little bit more secure. As we have seen in the browser era because the data are not stored in your device, this is where we are focused on.

Will Physical Bank Branches Cease to Exist?

Douglas Goldstein: Does the development of online banks and banking apps like this mean the end of physical bank branches? Are we at the end of that era now?

Martin Saidler: I think that’s a very interesting question and we discussed it many times with our internal team here as well as with our shareholders and with the banks. We discussed it also with major European and American banks and the answer, on average, everyone is convinced that the branches will not have any more physical branches, but instead of that, there will be mobile banking applications, online solutions. This doesn’t mean that the banks will be replaced and this is exactly our point of view. We are not looking to replace the banks because in the end you need to regulate a banking corporation. A company which is under certain control, under certain rules and where your efforts are, where your money is, has to be safe and regulated. But, you don’t need the branch for that and this is exactly our perspective. The branches will be replaced by applications. They will teach you the solutions, the smart phone solution, the browser solution, a tablet or whatever you have in mind.

Douglas Goldstein: We are talking about people handling their banking, their dollars, or if you work in Israel there’s shekels. How about dealing with these crypto currencies like bitcoin? Is that something you think has a future or is that not really on the table right now?

Martin Saidler: Personally, I don’t believe in the solution of bit coins and I believe in the concept of digital currency. But why not change the U.S. dollar, the shekel or the euro into a digital currency? This is a solution you have. You need trust in your currency. What I think will happen is – and many, many companies are discussing this, even the banks – is the block chain technology behind it. The idea behind the digital currency, the infrastructure, the technology from my perspective would be very helpful for our system and it will be installed in the next few years. But in the currency itself as a bitcoin, I don’t believe. I believe in the technology of bit coins and the block chain that is behind it and this is the point of view I see from here.

Douglas Goldstein: How can people follow you and follow the work that you are doing?

Martin Saidler: If you want to download the application, or just take a [different] look at what we are doing our website is: www.centralway.com in one word. You will find everything about me, about my team, about the history and of course about our product.

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