In today’s digital world, we’re so used to managing our finances online that it’s become second nature. But all this convenience shouldn’t mean we have to sacrifice peace of mind.
Cybersecurity threats are constantly becoming more sophisticated and harder to spot, putting our finances and our private information at risk. Fortunately, there are steps banks and consumers can take to keep their money and personal identifiable information (PII) as secure as possible.
What you need to know
- Multi-factor authentication helps protect your account with an extra layer of security.
- Many banking platforms use encryption to help keep your personal and account details safe from scammers.
- There are plenty of actions you can take, including using password security best practices, to avoid online banking scams and fraud.
The rise of online banking
The convenience and accessibility of online banking make it so easy to manage finances that it’s no surprise it’s becoming one of the most popular ways to bank. Now, more than three-quarters of Americans (78%) prefer to bank digitally, according to a March 2022 Ipsos-Forbes Advisor survey. Taking banking online benefits traditional banks, too. They can reduce the overhead costs associated with operating brick-and-mortar branches and offer more competitive rates for products and services.
However, not everyone is ready to embrace online banking. According to Bankrate, the security of accounts and funds is a big worry for consumers, with 96% citing it as a concern. Though online banking is safe, it’s not without its risks, and fraud happens. In fact, 42% of consumers have experienced a personal banking or credit fraud incident in the last year.
Fraud is stressful for customers, and it’s bad for banks because it damages consumer trust and loyalty. According to Bankrate, 67% percent of consumers who were notified about fraud on their account changed banking platforms because of it.
Common threats in online banking
When you bank online, there are a few cybersecurity threats you should be aware of.
Identity theft
Identity theft is the practice of illegally obtaining someone’s personal information and using it fraudulently, usually for financial gain. Identity thieves will use your information to do things like apply for a new credit card, file fraudulent tax returns, or take over your accounts.
Phishing
Phishing is a cyberattack that happens over email, text, or even the phone. Scammers will typically disguise themselves as a trusted source, then they’ll trick you into sharing personal information by taking actions like logging into your account, changing your password, installing software, or transferring money. Phishing scams have become increasingly sophisticated over the years, so it’s important to be skeptical of unsolicited communications, even if they claim to be a person or company you know.
Smishing
Smishing is a phishing attack that targets your personal and financial information via SMS or text message. Sometimes, a scammer will text you pretending to be your banking platform, notifying you of an unauthorized transaction on your account. They may then prompt you to click a link that leads you to a form that appears to be your bank’s login screen—which is programmed to capture your login credentials if you enter them. You could also receive a phone call from someone pretending to be a customer service representative.
Malware
Malware (or malicious software) is intrusive software designed to cause havoc, steal data, and corrupt your business computer network. Examples of malware include viruses, spyware, adware, and ransomware.
Social engineering scams
Social engineering scams involve various tricks and techniques with the goal of accessing sensitive information. Scammers will exploit human error to get a hold of passwords, account information, and security question answers. Sometimes, these “human hacks” can appear as innocuous as someone asking to charge their phone on your laptop at a coffee shop.
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Essential online banking security measures
Over the years, some essential security measures have been developed to combat cybersecurity threats. These days, logging into accounts with a username and password isn’t enough. Usernames can be easy to discover (especially if the username is your email address). Because passwords can be hard to remember, consumers tend to keep them simple and use the same ones across multiple sites. This is partly why multi-factor authentication (or MFA) has become a useful security measure.
When you sign in somewhere, instead of only providing your username and password, your bank will also ask you to provide an additional piece of information to verify your identity. It could be a unique passcode sent to your phone as a text message or even biometric sign-in, like your fingerprint. This extra layer of security makes it harder for bad actors to get access to your accounts.
Many banks use sophisticated encryption methods to protect the information of their customers. Encryption involves turning sensitive information into an unreadable code that scammers or unauthorized parties can’t decipher. Secure Sockets Layer (or SSL) technology is also a common security measure, where an internet connection is made secure by encrypting the data that’s sent between your browser and the website you’re visiting. Many banks will also release regular software updates and patches—such as program modifications developed to improve security—to stay ahead of bad actors.
The role of banks in enhancing security
In response to fraud, banking platforms are stepping up their game to protect their customers. Investing in sophisticated data encryption and multi-factor authentication software is a crucial first line of defense. And automatic sign-out is a simple but very effective tool that keeps customers safe by terminating a banking session if they’ve been inactive for too long.
Real-time fraud monitoring systems use advanced algorithms to analyze transaction patterns and detect anomalies, allowing banks to take immediate action and protect customer accounts. Those systems are backed by dedicated anti-fraud departments that actively monitor transactions and track any irregularities that could signify fraudulent activities. Banks also often partner with cybersecurity firms to protect their digital infrastructure from cyberattacks. With the right banking partner, even the most sophisticated threats can be neutralized.
User responsibilities in maintaining security
While banks need to do their part on the back end, there are things every business can do to maintain their security while banking online. Staying in the know when it comes to cybersecurity will help you feel at ease and in control, even if something happens to your account.
Here are some things you can do to keep your accounts secure or reduce damage if fraud does occur:
- Steer clear of public Wi-Fi when you’re using your banking site or mobile app
- Use a multi-factor authentication app like Google Authenticator in addition to your banking platform’s MFA
- Use a strong password and update it often
- Store your password in a trusted password manager like 1Password to remember it for you—don’t rely on your browser because that’s not as secure
- Stay vigilant and be on the lookout for new phishing scams
- Create transaction thresholds and other alerts
- Set up fraud alerts via text or email
Can you bank safely online?
Online banking is generally very safe, but it’s important to stay alert and be aware. Make sure your bank has robust security measures in place that meet or exceed industry standards, and take your own precautions. By being proactive, you can protect your accounts and enjoy the convenience and accessibility that banking online offers.
See all the ways Bluevine helps protect your business bank account.
