Fax Machines: The Irony of Living in the Digital Age

Why faxes are still relevant and why organizations need to stop telling customers that physical copies of documents are needed

I recently moved from the retail industry to consumer banking.

Most people are aware that banking is a serious industry which requires participants of any financial transaction to leave a paper trail. That is why in spite of being in the digital age, retail banks still require customers to fill out paper slips when making deposits or withdrawals. The paper trail is especially important after 9/11, since governments all over the world have engaged the help of financial institutions (or in fact, forced them to with the passage of laws) to detect, report, hinder and obstruct money laundering or sending money for purposes of terrorism.

When I gave a presentation to an undergraduate communication class three years ago on the theory of the diffusion of innovations, I mentioned that the financial industry was the first to make use of the telegram for arbitrage and to profit from the first move from the latest news (such as for futures trading).

It therefore came as a surprise to me that in my new job, faxing documents to corporate headquarters (rather than scanning the originals and emailing digital copies) was standard operating procedure. What, you say? Banks offer – and in fact encourage – customers to sign up for internet banking nowadays. Why would they still use fax machines so frequently?

Ironically, the reliance on fax machines is due to technology. Because bankers (and I use the term loosely to describe any bank employee who has access to banking operations) have access to customer accounts and by extension, customers’ money and other sensitive personal information (including where customers spend their money), banks are often prime targets for malicious hackers. Because an organization’s online security is only as strong as its weakest link, bank management take no chances and limit access to the internet to employees who really have a need for it. Most bank employees thus have only access to the company intranet through their workstations.

With only access to company intranet, bankers can’t receive email from outsiders (such as contractors, suppliers and customers). The only way for you to send them documents through a wire or cable is by fax. That is why your bank and credit card company insist that you fax documents to them instead of emailing them.

Some entry level customer service representatives explain to irate and bewildered customers that only faxes are accepted because the organization requires a hard copy of the document. Even if hard copies are preferred over soft copies (because of the requirement or need to file), one could email the organization the document and have them print it out. It has nothing to do with that they require physical copies because last I checked, all banks had at least two laser printers in each branch. It has to do with online security. When have you ever heard of a fax machine being hacked and sensitive information was stolen?

These employees fail to understand the bigger picture when they explain to customers the policy regarding the need for physical copies. They don’t even have to understand anything about IT security – they only need to know that they have no access to the internet. Someone explain to them, please, and save their organizations from embarrassment.



If you like this blog, please like it on Facebook! You may also want to visit my other blog, I Lost My Job Because of Social Media and follow me on Twitter (@nicholas_cheong).