Digital banking has revolutionized the way individuals manage their finances, providing a convenient and efficient platform for conducting various banking transactions. Online and mobile banking services offer a plethora of features that allow users to pay bills, transfer funds, deposit checks, and monitor their accounts from the comfort of their homes or on the go. According to a recent survey by Ipsos-Forbes Advisor, a significant majority of Americans, approximately 78%, prefer digital banking over traditional in-person banking methods.
However, the convenience and accessibility of online banking come with inherent security concerns. As technology advances, so do the tactics of cybercriminals seeking to exploit vulnerabilities in digital banking systems. To ensure the safety of personal and financial information, both financial institutions and individual users must implement robust security measures.
Here are detailed strategies to enhance the security of online banking:
1. Strong Passwords: Create complex, unique passwords for online banking accounts. Avoid using easily guessable information like birthdates or common words. Opt for Strong and Distinct Passwords. Your password could serve as a gateway for hackers, even without your awareness.
Some common errors you might be committing with online banking passwords involve:
• Utilizing personal details like your name, address, or birthdate
• Opting for shorter passwords
• Depending on common words or basic number combinations
• Using the same password across multiple logins
• Neglecting to update passwords on a regular basis
While these practices may aid in remembering your passwords, they also facilitate hackers in guessing your password and gaining access to your online banking data. Here are some suggestions for crafting more resilient passwords for online banking:
• Select longer passwords, such as a phrase rather than a single word
• Incorporate a mix of uppercase and lowercase letters
• Integrate numbers and special characters
• Steer clear of predictable sequences like “1234”
• Refrain from incorporating personal information such as your name, pets’ names, or birthdate
• Avoid storing your login credentials in your online banking or mobile app
- Refrain from jotting down passwords on the back of debit or credit cards or storing them in your wallet
- Regularly update your online banking passwords. Change them every three to six months to reduce the likelihood of your password being compromised or deciphered by hackers.
Additionally, consider utilizing a password manager to securely store and manage your passwords, making the use of longer and more intricate passwords more convenient.
2. Two-Factor Authentication (2FA): Enable 2FA to add an extra layer of security to the login process. This typically involves receiving a one-time code on a trusted device for account access.
It basically provides an additional layer of security verification during the login process for your online or mobile banking account. Initially, you input your login credentials, followed by successfully completing a secondary security check.
For instance, you may be required to input a unique code, verify your account via an automated phone call, utilize biometric authentication, or identify a specific image. This added step makes it challenging for hackers or identity thieves to gain unauthorized access to your account, even if they possess your online or mobile banking password.
Consult your bank or credit union to inquire about the availability of two-factor authentication and how to activate it.
3. Secure Networks: Avoid conducting online banking transactions on public Wi-Fi networks, as these are more susceptible to hacking. Use secure, private networks for financial activities.
When it comes to public Wi-Fi, while it offers convenience for staying connected while on the move, it cannot be relied upon for security. According to NortonLifeLock Inc., a leading consumer cybersecurity provider, public Wi-Fi presents significant security risks, including:
• Man-in-the-middle attacks, where hackers can intercept your online banking and other activities
• Data transmissions over unencrypted networks
• Malicious hotspots
• Malware and spyware
It is advisable to refrain from conducting online or mobile banking transactions when connected to a public Wi-Fi network. However, if you must access your accounts under such circumstances, consider the following tips to enhance security:
• Disable public file sharing on your operating system
• Stick to secure websites indicated by “https” in the URL, which triggers the lock icon in your browser. Your device’s firewall may flag unsafe sites automatically.
• Think about using a virtual private network (VPN) to establish a private network accessible only to you. You can configure a VPN through a VPN service on your mobile device or laptop.
4. Banking Alerts: Set up account alerts to receive notifications of any unusual account activities, such as large transactions or login attempts from unfamiliar devices.
Banking alerts provide real-time notifications for specific activities, alerting you promptly to any potentially fraudulent or suspicious actions. These alerts can be set up to notify you via email or text message for various events, such as:
• Low or high balances
• New credit and debit transactions
• Addition of new linked external accounts
• Failed login attempts
• Password changes
• Updates to personal information
If you receive an alert indicating suspicious or fraudulent activity, it is crucial to contact your bank or credit union immediately and update your online and mobile banking passwords.
5. Phishing Awareness: Be cautious of emails, messages, or calls requesting personal information or login credentials. Verify the authenticity of communication from your bank before sharing any sensitive data.
Phishing stands out as a prevalent method employed by identity thieves to illicitly obtain personal and financial data. Typically, this type of scam involves deceiving individuals into divulging their information.
Phishing schemes manifest in various forms, often through email or text messages. For instance, you might receive an email appearing to be from your bank, instructing you to log in to your account and update your details.
Upon clicking the provided link, you could unknowingly access a counterfeit website designed to capture your login credentials. Alternatively, clicking on a link may result in downloading tracking malware onto your device, enabling identity thieves to record your keystrokes.
To mitigate the risks associated with online banking phishing scams, consider the following precautions:
• Verify the sender’s email address by contacting your bank to confirm the legitimacy of the email and the address used.
• Hover over links within emails to preview the destination URL before clicking.
• Refrain from sharing personal information in response to emails requesting such details. Instead, contact your local branch or customer service to validate the legitimacy of the request before divulging any information.
6. Trusted Apps: Only download and use official banking apps from reputable sources. Avoid third-party apps that may compromise the security of your financial information.
Financial applications, such as mobile banking apps, offer convenience for tasks like banking, bill payments, money transfers, and shopping. However, their level of security varies.
When using your bank’s mobile app, ensure that you are using the official version. The safest way to do this is by downloading the app directly from your bank’s website. If you opt to download the app from platforms like the App Store or Google Play, verify its authenticity by reviewing developer information and user feedback.
Be cautious about granting access to your online and mobile banking information to other apps. For instance, if you choose to utilize a budgeting app for financial management, be aware that these apps typically require your login details to aggregate data and provide financial insights, potentially exposing your information to risks.
Before installing a financial app, assess its ratings, investigate its security protocols, and check for any history of data breaches.
In addition to individual security practices, financial institutions employ advanced data security measures to protect customer information. These measures include:
- Data Encryption: Banks use encryption technology to secure data transmitted between users and their servers, ensuring that sensitive information remains confidential.
- Multi-Factor Authentication (MFA): MFA requires users to provide multiple forms of verification, such as passwords, biometrics, or security tokens, to access their accounts.
- Fraud Monitoring: Banks employ sophisticated monitoring systems to detect and prevent fraudulent activities, such as unusual account behavior or unauthorized transactions.
- Privacy Policies and Training: Financial institutions have strict privacy policies in place to govern the handling of customer data. Regular employee training ensures compliance with these policies and enhances data security.
- Regulatory Compliance: Banks adhere to industry regulations and standards to maintain data security and protect customer information. Compliance with guidelines set by regulatory bodies enhances the overall security posture of financial institutions.
While online banking presents certain risks, such as phishing scams and potential maintenance outages, the benefits of convenience, control, security, accuracy, and access to useful tools outweigh these risks. By following best practices for online security, staying informed about potential threats, and leveraging the security measures implemented by banks, individuals can confidently engage in digital banking while safeguarding their financial information.
The evolution of digital banking has transformed the way individuals manage their finances, offering unparalleled convenience and accessibility. By prioritizing security and adopting proactive measures to protect personal information, users can enjoy the benefits of online banking while minimizing the risks associated with cyber threats and unauthorized access.
