According to the FBI Bank Crime Statistics, there were more...

According to the FBI Bank Crime Statistics, there were more than 4,000 bank robberies in the United States in 2015, an increase of 3.9 percent over 2014 . The FBI claims that banks have made themselves easy targets by refusing to install clear acrylic partitions, called bandit barriers, that separate bank tellers from the public. According to a special agent with the FBI, "Bandit barriers are a great deterrent. We've talked to guys who rob banks, and as soon as they see a bandit barrier, they go find another bank." Despite this finding, many banks have been reluctant to install these barriers. Wouldn't banks have a strong incentive to install bandit barriers to deter robberies? Why, then, do so many banks not install them?

Key Concepts

Cost-Benefit Analysis

This concept refers to the process of comparing the costs of a decision or investment with the benefits that it will produce. In contexts like security improvements, organizations assess whether the upfront expenditure and possible operational impacts are justified by the expected reduction in losses or damages. This analytical framework helps determine if a safety measure is economically viable despite the potential for reduced customer appeal or disruption during implementation.

Externalities and Free-Rider Problems

Externalities occur when a decision or action affects third parties who did not choose to incur those effects. In situations where security measures benefit not only the investing party but also its competitors—by deterring criminal activity in the area—there is an incentive for individual institutions to underinvest, hoping others will bear the cost of preventing a common risk. This free-rider problem can lead to suboptimal safety investments overall.

Incentive Structures

Incentive structures determine how costs and benefits are aligned and how organizations make decisions within a competitive framework. Even when a measure is effective at reducing risks, if the direct cost savings or reputational benefits do not accrue solely to one institution—or if there is a perceived cost in terms of customer experience—there may be insufficient motivation to implement it. These structures influence strategic choices that balance immediate financial performance against long-term risk management.

Risk Management

Risk management involves identifying, assessing, and prioritizing potential risks and implementing controls to mitigate or manage them. Organizations must weigh the probability and impact of adverse events against the costs of preventive measures. In contexts where risks are shared or perceived as minimal, decision-makers might hesitate to invest in protective measures that seem costly relative to the anticipated reduction in risk.

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