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Digital banking (online and mobile banking) makes it easier to manage finances. With digital banking technology, you can pay bills, deposit checks and transfer money wherever you are. Largely due to their convenience, online and mobile banking are the two most popular ways to bank. More than three-quarters of Americans (78%) prefer to do their banking digitally, according to a March 2022 Ipsos-Forbes Advisor survey.
But how secure are online and mobile banking? And is your information safe?
While reputable financial institutions implement a host of security measures, there are steps you can take yourself to keep your financial and personal information safe from hackers.
Here are six ways to protect your online banking information.
1. Choose strong and unique passwords
Your password can create an opening for hackers, even if you don’t realize it.
Some common mistakes you can make with online banking passwords include:
- Use personal information, such as your name, address or date of birth
- Choose shorter passwords
- Rely on common words or simple number combinations
- Use the same password for multiple logins
- Not updating passwords regularly
These things may make it easier to remember your passwords, but they make it easier for hackers to guess your password and gain access to your online banking information. Here are some tips for creating stronger passwords for online banking:
- Choose longer passwords, such as a phrase rather than a single word
- Use a mix of upper and lower case letters
- Include numbers and special characters
- Avoid common sequences, such as “1234”
- Avoid using personal information, such as your name, the name of your pets, your date of birth, etc.
- Do not store your login information in your online banking or mobile application
- Do not write passwords on the back of debit or credit cards or keep them in your wallet
Regularly update your online banking passwords. Change them every three to six months to reduce the risk of your password being stolen or cracked by hackers.
And consider using a password manager to store and protect your passwords and make it easier to use longer, more complicated passwords.
2. Enable two-factor authentication
Two-factor or multi-factor authentication can add a second layer of security verification when logging into your online or mobile banking account. You first enter your username and password, then you must pass a second security test.
For example, you may need to enter a special code, verify your account through an automated phone call, use biometric verification, or identify an image. This makes it difficult for a hacker or identity thief to unlock your account, even if they know your online or mobile banking password.
Ask your bank or credit union if two-factor authentication is an option and how to enable it.
3. Avoid public Wi-Fi
Public Wi-Fi is handy when you need to stay connected on the go, but you can’t rely on its security. According to NortonLifeLock Inc., the consumer cybersecurity provider, some of the most significant security risks posed by public Wi-Fi include:
- Man-in-the-middle attacks, in which hackers can electronically “eavesdrop” on your banking and other online activities
- Data transmissions over unencrypted networks
- Malicious hotspots
- Malware and Spyware
It’s best to avoid using online or mobile banking when you’re on public Wi-Fi.
If you need to access online banking or mobile banking over public Wi-Fi, here are some tips to stay safe.
- Disable public file sharing. Find out how to do this for your operating system.
- Stick to secure sites. Look for “https” in the site URL, which triggers the lock icon in your browser. Your laptop or mobile device’s firewall can automatically flag sites that are deemed unsafe.
- Consider using a virtual private network (VPN). This creates a private network that only you can access. You can set up a VPN through your mobile device or laptop using a VPN service.
4. Sign up for bank alerts
Bank alerts notify you when certain actions occur. You receive near-instant notifications of any potentially fraudulent or suspicious activity. It is often possible to receive alerts by e-mail or SMS for the following:
- Low or high balances
- New credit and debit transactions
- New linked external accounts
- Failed login attempts
- Password changes
- Personal Information Updates
If you receive an alert and suspect fraudulent or suspicious activity, contact your bank or credit union immediately and change your online and mobile banking passwords.
5. Beware of phishing scams
Phishing is one of the most common methods used by identity thieves to gain access to personal and financial information. This type of scam usually involves tricking you into giving up your information.
Phishing scams can take different forms, but they are often email or SMS scams. For example, you might receive an email that appears to be from your bank telling you that you need to log in to your account and update your information.
You click on the link and connect to what appears to be a legitimate site but is a bogus site. Or, clicking a link downloads tracking malware to your computer, allowing identity thieves to log your keystrokes.
In any case, you gave your login credentials without realizing it. For this reason, it is important to carefully review all emails that request financial or personal information.
Here are some tips to avoid online banking phishing scams:
- Check the sender’s email address. Call your bank and ask if they sent you an email. Check the email address that was used.
- Hover over the links. Hovering over a link in an email can reveal where it will take you.
- Do not share personal details. If you receive an email from your bank requesting information, call your local branch or customer service to verify that it is legitimate before sharing details.
6. Choose Trustworthy Financial Apps
Financial apps, including mobile banking apps, can help with banking, paying bills, sending money, and making purchases. But they are not so safe.
If you plan to use your bank’s mobile app, be sure to use their official app. The best way to do this is to download the app from your bank’s website. If you are downloading the app from the App Store or Google Play, verify that it is legit by checking the developer details and reading the reviews.
Consider which apps you allow to access your online and mobile banking details. For example, you can use a budgeting app to manage your money. These apps usually ask you to share your login credentials to extract information and create a financial picture, putting your data at risk.
Before downloading any financial app, check its ratings. Research app security policies and find past data breaches.
Is online banking secure?
Online banking is a safe way to manage your money when your bank follows strict security protocols and you know how to spot potential security threats.
Banks use various security measures to protect customer information. These measures may include:
- 128-bit or 256-bit data encryption
- Encrypted email
- Auto-disconnect functionality for online and mobile banking
- Two-factor authentication
- Ongoing Account Monitoring
- Verification of the electronic signature
What is data security in banks?
Data security refers to banks’ strategies to ensure the security of customer data. The main objective is to protect any personal information against unauthorized access.
According to the American Bankers Association, a trade association for the American banking industry, some of the most commonly used data security measures include:
- Multi-factor authentication
- Privacy policies and training
- Fraud Prevention Monitoring
Banks must report a data breach to regulators within 36 hours if the breach is likely to significantly affect banking operations. The rule, which took effect in May 2022, is a joint effort of the Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency to strengthen accountability in the banking industry. With this new rule, banks have even more incentive to take measures to protect the security of customer data.
Online banking offers convenience and control over your financial life. You can mitigate risk by being proactive and protecting your online banking information. This decreases the chances of your information ending up in the wrong hands.
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Frequently Asked Questions (FAQ)
What are the main security issues related to online banking?
Some of the biggest security issues associated with online banking include malware or phishing scams to intercept or steal customers’ personal and financial information. Online banking is secure. However, hackers are constantly at work, finding new ways to circumvent security measures.
What’s the safest way to bank online?
The safest way to bank online is to access your bank’s official online or mobile banking app using a secure Wi-Fi connection. Banking with unverified or untrusted apps or through unsecured Wi-Fi connections could leave you vulnerable to cyberattacks.
How secure is online banking on a mobile phone?
Mobile banking is considered safe if you use a secure internet connection and access your accounts from a trusted app. You can add additional layers of security by setting up multi-factor authentication and using your phone’s security tools, such as fingerprint or face ID.