The decline of the bank safe deposit box – and the rise of a new breed
Even as banks phase out their safety deposit boxes, the industry itself is soaring – led by leaner, more innovative, more technologically advanced secure storage companies like Knox.
The bank safe deposit box has been a mainstay of heist movies for decades. From Heat to Ocean’s Eleven to the Inside Man to The Thomas Crown Affair, super-suave, ingenious bank robbers risk their lives and stake their careers on bypassing seemingly impossible security barriers to access the untold riches therein.
Largely as a result of these films, bank safe deposit boxes have come to be associated with glamour and wealth and sophistication, and with top-notch levels of security and confidentiality.
The reality, however, is, in fact, quite different.
Recent decades have seen a wholesale scaling back of bank safety deposit boxes, and the emergence of new breed of more innovative, more tech-savvy, more security-conscious private firms like Knox offering a highly sophisticated, dramatic upgrade on the classic bank solution.
In general, these private safe deposit storage companies are becoming popular because they offer a number of advantages over traditional bank safe deposit boxes, including greater accessibility, more control over the contents of the box, better security and privacy, and a wider range of services.
“People tend to trust private storage companies more than banks, as they are often viewed as more secure and less likely to be vulnerable to theft or other forms of abuse,” says Wayne Becker, founder of Knox, which operates high-security vaults from an impregnable facility in Johannesburg (the premises formerly housed the US embassy).
In terms of accessibility, private storage companies offer more frequent access to safe deposit boxes, where banks have severely limited hours of operation.
There’s also the issue of control: private companies may allow customers to store a wider range of items, including valuable or sensitive items that banks may restrict.
A major benefit is that private storage companies such as Knox typically have advanced security measures in place, such as biometric access controls, multiple layers of protection, and surveillance cameras.
Many also offer additional services such as climate-controlled storage and insurance coverage, while confidentiality policies are generally stricter and better enforced.
Little surprise then that the bank safety deposit box is in retreat. A 2019 survey in the US found that nearly 10% of banks had closed their safe deposit box services in the previous five
years. Similarly, a survey by the American Bankers Association found that fewer than 10% of consumers use safe deposit boxes, with many people opting for alternative storage solutions such as private storage companies or home safes. Banks have also been known to increase fees for safe deposit boxes, which has led many customers to switch to alternative storage solutions.
“Bank safe deposit services are declining due to a combination of factors such as closures, changing customer preferences, and increased fees,” says Becker. “The decline has created opportunities for private safe deposit storage companies such as Knox to fill the gap and meet the growing demand for secure storage solutions.”
Little surprise then that globally, the private safe deposit box market is expected to grow from around $45 billion in 2023 to $60 billion by 2025, at a rate of nearly 5% according to a recent international study.
“Largely, the market growth is being driven by increased demand for secure storage solutions and advancements in technology,” Becker explains.
“We’re seeing greater demand for secure storage solutions to protect valuables and important documents. People are also increasingly aware of the importance of protecting their privacy and personal information, leading them to seek secure storage solutions that guarantee confidentiality.”
Other factors, he says, include the emergence of biometric and cloud-storage tech (making it easier for private storage companies to offer more secure and convenient storage solutions), as well the explosive growth in the e-commerce industry – with the resultant increase in the number of valuable items being bought and sold online fuelling increased demand for secure storage solutions.
Economic uncertainty has also played a role, with global crises such as the COVID-19 pandemic leading people to seek secure storage solutions to protect their assets in an unstable environment.
It all adds up to exciting times for companies like Knox at the forefront of customer service and security technology.
The bank safety deposit may be an endangered species, but in its place a whole new vibrant ecosystem has emerged.
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