Many different financial institutions are available for a broad spectrum of customers. These institutions include banks, credit unions, trust companies, savings associations, industrial banks, transmitters of money abroad, issuers of traveler's checks, and offices of foreign banks. Banks and credit unions are the two most well-known and used options by Americans.

Banks and credit unions are similar because they both offer services such as account management, federal insurance, and use of ATMs. The main difference is that banks are commercially owned and credit unions are owned by their members. Credit unions allow members to share funds while banks are designed to keep accounts separate and to make a profit from this protective service. Though every financial institution has unique characteristics, all are required to follow certain regulations for security by law.

Security Regulations for Financial Institutions

Since the terrorist attacks that occurred on September 11, 2001, all financial institutions are required to make greater efforts in achieving security on banking. The USA PATRIOT Act was established a month following the attacks to help prevent future cases of terrorism and fraud. The title of the act stands for Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism.

The USA PATRIOT Act was designed to deny terrorists the right to participate in using the U.S. financial system. This act primarily prevents from cases of fraud, money laundering, and terrorist financing. By actively screening new applicants and comparing their names to government watch lists, financial institutions can abide by the regulations of this act. Many software programs are available as well to help institutions in the process.