Steps to safer online banking
Online banking has allowed us to manage financial assets anywhere, anytime. This newly-gained flexibility forces banks to lose their substance: no need to visit the physical branch locations. Instead, financial institutions only serve people looking for face-to-face consultations, currency exchanges, or loans. As most monetary affairs move to the online world, you cannot help but wonder whether they are just as secure.
How online banking transforms financial lifestyles
The reconstruction of the financial market leans towards a more positive consumer experience. Online banking is a big part of this revolution. It shapes and embraces a more easy-going approach to finances. Since many operations can occur without leaving the house, institutions adapt or risk losing their clients. Usually, the shift from legacy business models is beneficial to both consumers and banks. However, the race for innovation in online banking introduces competitiveness amongst financial entities.
Statistics for global adoption of online banking services are remarkable. From 2009 to 2019, the clientele of online bank services doubled in the EU. Over 1,500 bank branches in the US closed down, mostly due to a staggering 89% of people managing their bank accounts online. A similar scenario might happen in any country, as the demand for physical institutions will only decrease. Successful collaborations between banks and fintech induce steady growth in online banking users.
However, traditional financial institutions compete with neobanks. Newcomers in the financial industry, neobanks focus on reexamining banking and remodeling it from the roots. Neobanks operate with fewer requirements for new clients and usually have no physical locations. They incorporate people outside the traditional banking system and lure others with smaller fees. You might have heard of some: Monzo, Barclays, Revolut, NatWest, and others.
Can the digital world tackle threats to consumers’ finances?
Hackers’ interest in online banking grows alongside the global integration of e-banking. Like any other pervasive technology, infrastructures of online banking systems are not immune to foul play. Fraudulent actors test their resistance in attempts to exploit weak entry-points. Since 2015, the number of illegal mobile app transactions sky-rocketed by more than 600%. Several tendencies link to such startling statistics: system flaws, lack of secure networks, social engineering, and rogue mobile apps.
Consumers expect transparency, loyalty, and security from financial institutions. However, building an airtight online banking system is not a straightforward route. According to a report on banking app security, none of the tested subjects presented adequate protection for its clients. One glaring gap is that 43% of mobile apps stored confidential details on smartphones without proper encryption. In 79% of cases, mobile apps contained high-risk flaws, with the potential to facilitate unauthorized access. Tests also proved iOS apps to be much more resistant. However, about 29% of Android online banking apps showed signs of highly dangerous flaws.
Network security is a blind spot for many since it frequently lacks strong password validation and encryption procedures. So, while the online banking service might be somewhat secure, your network could put your traffic in jeopardy.
Con artists can employ sophisticated techniques to extort personal details. For instance, spear phishing could send a customized attack your way. Usually, they present convincing evidence of authenticity, challenging to dispute as false.
Perpetrators can construct malicious applications with the sole purpose of gaining access to online banking details. In 2019, the number of rogue mobile apps grew by 63%. Usually, crooks monetize from trust in notorious brands as the medium to deceive.
How to secure your online banking transactions
- Two-factor authentication. Crooks could perform credential stuffing to access online banking accounts. Hence, there needs to be a complex verification system, authenticating all actions. Two-factor authentication is the preferred security method, preventing illegal access even if hackers obtain private credentials. However, do not choose the SMS option for 2FA: it is the weakest. Fingerprinting and facial recognition have also evolved into widely-integrated features for verifying procedures.
- Fraud monitoring. Most bank service providers surveil account activities. Contacting clients to inform them of potential security breaches helps build trustworthy relationships. Financial institutions should aim to report unusual behavior, such as cash withdrawals or transactions in unfamiliar settings.
- Activate account notifications. Online banking clients are welcome to enable push notifications, informing of recent withdrawals, transfers, and changes. Turn this feature on to detect suspicious activity as quickly as possible.
- Use reliable e-commerce providers. Shopping became a home activity thanks to online banking. However, unreliable vendors could be after clients’ financial data. Hence, avoid visiting little-known e-shops or making transactions via unknown payment systems.
- Be suspicious about random emails. Phishing could lead to financial or data losses. It refers to hackers disguised as reliable entities in electronic communications. While the monetary gain is a preference, some crooks settle for private data such as usernames and passwords. A phishing email could mislead clients into revealing online banking account details. So, be extremely cautious when you receive an email from your bank service provider.
- Improve connection security. Most online banking operations happen at home. So, you need to guarantee that your network can resist attempts to intercept them. For instance, wireless networks offer options to enable encryption (WEP, WPA, or WPA2). In addition to this, you can protect devices by equipping them with privacy-first software. Atlas VPN makes your browsing anonymous by encrypting and trapping data in an isolated tunnel. This compelling force secures all your web traffic, including transactions via online banking apps and websites.
Cybersecurity Researcher and Publisher at Atlas VPN. Interested in cybercrime, online security, and privacy-related topics.