5. You're no difference from someone using a bank because everything you do under a centralized exchange is from a central authority like the banks and other centralized institutionizations did.
Bank is better because they are likely to protect your fiat than exchange will protect your coins. There can be robbery in your bank, you can go to another branch the next day to deposit or withdraw, you can make use of their online banking, this is the way banks operate in my country, but if an exchange is hacked, your coins are coin or other inconveniences may occur.