A bank statement is an official summary of financial transactions within a specified period for each bank account held at a financial institution. Statements are numbered, indicate the covered period, and may include payment deadlines. Once issued, details cannot usually be altered; errors are corrected later with explanations. Customers use statements to monitor cash flow, detect fraud, and perform bank reconciliations. Traditionally mailed or picked up at a branch, many institutions now provide electronic versions and downloads for accounting software. Before official statements, transaction histories are accessible online, via telephone banking, or some ATMs. With permission, data can be shared using open banking for account aggregation services.
Paper statements
Historically, bank statements were paper statements produced periodically on a monthly, quarterly or annual basis. Since the introduction of computers in banks in the 1960s,2 bank statements have generally been produced monthly. Bank statements for accounts with small transaction volumes, such as investments or savings accounts, may be produced less frequently. Depending on the financial institution, bank statements may also include certain features such as the canceled cheques (or their images) that cleared through the account during the statement period. Paper statements are typically posted to a customer's home address, and sometimes a copy may be posted to, say, an accountant or guardian.
Some financial institutions use the occasion of posting bank statements to include notices such as changes in fees or interest rates or to include promotional material.
Financial institutions are required to produce paper statements to customers unless the customer requests either electronic statements or no statements at all. Historically, the production of statements was regarded as part of the banking function, the cost of which was part of providing the service. More recently, however, to encourage customers to opt to receive electronic statements, some financial institutions charge a fee for paper statements.
Some countries such as Japan never had a tradition of mailing statements, with individual account holders being expected to keep track of deposits, withdrawals, and balances using their own passbooks at ATMs.
Electronic statements
Since the late 1990s, banks have encouraged customers to receive statements electronically. The switch normally requires express customer consent, which is typically obtained through an online banking system. Producing electronic statements saves financial institutions the significant cost of printing statements, folding them into envelopes and postage. In addition, customers could receive statements more promptly, and not be dependent on the postal delivery service. The customer could print the statement at their premises3 if they needed one, or have access to historic statements on the institution's website as needed. Other parties may be authorized to have access to the customer's financial information on the institution's website.
Electronic statements may be sent as attachments to emails or, as a security measure, as a reminder that a new statement is available on the financial institution's website. Whether such statements are transmitted as attachments or from the website, they are commonly generated in PDF format,4 to reduce the ability of the recipient to electronically alter the statement.
Due to identity theft concerns, an electronic statement may not be seen as a dangerous alternative against physical theft as it does not contain tangible personal information and does not require extra safety measures of disposal such as shredding. However, an electronic statement can be easier to obtain than a physical one through computer fraud, data interception, and/or theft of storage media.
Statement conventions
A bank deposit account is at the same time an asset of the depositor and debt of the bank. A statement typically presents the bank's view of the account, with credit entries increasing the bank's debit and debit entries reducing it. A customer tracking the same account as an asset would reverse the debits and credits from what appears on the statement.
Laws by country
United Kingdom
In the United Kingdom, all banks and building societies are required by law to provide a bank statement on paper or in another durable medium to customers,5 unless where the customer has a passbook, is a customer of an online only bank or has elected not to receive paper statements.6
United States
Banks in the United States are only required to send a statement for a checking account if one transaction has been made from that account in a month. Customers also have the option to receive electronic statements.7
See also
References
Elmblad, Shelley. "Are Your Financial Accounts Aggregated?". The Balance. Retrieved 15 August 2020. https://www.thebalance.com/what-is-account-aggregation-1293879 ↩
Royal Bank of Canada - History http://www.rbc.com/history/anytimeanywhere/automating-detail.html#5 ↩
How do I print my statement in Online Banking? https://supportcentre.natwest.com/olb/statements/ss1a/913238732/How-do-I-print-my-statement-in-Online-Banking.htm ↩
Producing PDF Statements https://cosmicapp.co.uk/uploads/files/cosmic-online.pdf ↩
Peachey, Kevin (12 February 2014). "More cuts for paper bank statements". Retrieved 26 April 2019. https://www.bbc.com/news/business-26076053 ↩
"Statements of account". FCA Handbook, BCOBS 4.2. Retrieved 26 April 2018. https://www.handbook.fca.org.uk/handbook/BCOBS/4/2.html ↩
"Does my bank/credit union have to send me a monthly statement for my checking account?". Consumer Financial Protection Bureau. 16 March 2018. Retrieved 26 April 2019. https://www.consumerfinance.gov/ask-cfpb/does-my-bankcredit-union-have-to-send-me-a-monthly-statement-for-my-checking-account-en-965/ ↩