Is Online Banking Safe?

Banks now make it possible for customers to do most of their banking online, paying credit cards, utilities, loans, mortgages, and even transferring money between accounts. Customers can save postage, paper, time and gasoline, and that’s just good business. But with fraud and identity theft on the rise, is online banking really safe? Given a few precautions, the answer is probably yes.

To bank online a customer first sets up login credentials at the bank’s website. Once logged in, the customer can access all of his or her accounts at that institution along with relative statements or bills. With a few clicks of the mouse a payment can be made by transferring money from a savings or checking account. The savings or checking account need not be at the same institution. The customer supplies the bank account number and a bank transfer is initiated between the two institutions.

A secure environment is provided for online banking, noted by the https at the beginning of the website’s address. The “s” indicates that the connection between the website and the customer’s computer is secured by point-to-point encryption. Data travels between these two points in cipher. If someone were to “steal” information en-route, they would see unreadable gibberish.

There are precautions to take, however, to make online banking safe. The first rule is never click through to a banking site via a link in email. The email might be a phishing scam, taking unsuspecting people to a fake website that looks exactly like the real thing. By setting up a fake banking site, thieves can capture usernames and passwords customers enter in an effort to login. These usernames and passwords can be used by the thieves at the real site to gain access to financial accounts and funds.

Even when sure that an email is legitimate, go to a banking site through normal channels as a matter of practice. Also note that banks do not ask for sensitive information through email. If the email asks for any kind of response or information, call your bank to verify using a phone book. Do not use phone numbers supplied in the email.

Secure online banking is safe over a wireless network, as the encryption used will prevent your information from being broadcast in readable form. However, it’s a bad idea to do online banking from someone else’s computer. A work computer, friend’s computer or public computer might have spyware, rootkits or keylogger programs running. A keylogger records everything typed into the keyboard, often transmitting the information to a remote third party who has infected the computer without the owner’s knowledge.

Along these lines, clean your computer with a few good scanners before starting online banking. Even if you run an antivirus program that looks for viruses, Trojans and keyloggers, many of these programs don’t search for rootkits or spyware. Use spyware and rootkit scanners reviewed and recommended by websites such as PCWorld, TuCows, ZDNet and MajorGeeks. Sticking with tried and true, recommended software will ensure you don’t unintentionally infect your computer while trying to clean it.

With a clean computer you’re ready to roll into online banking and experience the ease of paying bills online. Keep usernames and passwords secure, and if you are going to write them down, keep them in a private place. Once you’ve tried online banking, you’ll never look back.