There was a time when, if you needed spending money for the weekend, you’d have to withdraw everything you’d need over the counter at your local branch before it closed on the Friday. However, automatic cash machines changed all that and the rise of internet and mobile banking has made managing your money even easier.
But is online and mobile banking actually safe? And if so, what procedures are in place to ensure that your money and your identity isn’t stolen? Let’s take a look…
Banking in branch
The traditional way to manage your money is to engage with the counter staff at your local branch where, amongst other things, you can pay cash and cheques in, withdraw money and manage household bills and credit card accounts.
This type of banking usually leaves a paper trail and so to avoid any risk of your bank details being compromised you should make sure that you shred any bills or statements before throwing them away.
Your account is protected against fraudulent in-branch withdrawals by security measures such as providing proof of identity or entering your pin number into a keypad before any money can be taken out. If you use your branch regularly there is also the added security of the branch staff recognising you and knowing who you are.
You will also use your branch to set up meetings with bank managers or financial advisors should you want to take on products such as loans or mortgages.
The relentless rise of internet banking was put into some perspective last year when a study found that more people went online to manage their money than to go on Facebook. But what exactly is the big pull of online banking and is it safe?
Most bank accounts will now offer an online banking option that allows you to utilise all manner of banking facilities, such as checking statements, transferring money and setting up regular payments, from anywhere there is an internet connection. Obviously, you can’t use online banking to pay in cheques, withdraw money or moan to the counter staff about the state of the weather but it offers enough to make managing your money more convenient.
However, this is not without its security threats and there a range of ways that fraudsters will try to get their hands on your money. For instance, some will send viruses, often disguised as something desirable like a free music download, which will then take sensitive information from your computer such as login codes and passwords. The best way to protect against this sort of attack is to ensure that your anti-virus software is always up to date.
Another way in which criminals will try to access your information is via a ‘phishing’ email; and email that looks like it is from your bank and asks you to follow a link to verify your account, pin and password details. If you get one of these delete it and don’t even bother opening it (it could contain a virus) and remember that your bank will never ask for sensitive information.
When it comes to banking homepages, security varies from bank to bank but most accounts are at least password protected and have a number of security levels that you must pass before you – or anyone else – can access your details. These will usually require you to answer a number of personal questions as well as entering a memorable date or number from a series of drop down menus.
As an extra level of security when logging on or transferring money, some banks also require you to use a card reader ; a calculator-like device that requires you to insert the debit card associated with that account and type in your pin number.
Initially, mobile banking just offered everything that internet banking did but had the added convenience of being accessed via your smartphone. However, as technology moves on so quickly it’s now quite possible that mobile banking could replace debit and credit cards, and even cash, as banks are now offering mobile payment services, similar to contactless credit card technology.
But mobile banking suffers even more security threats than online banking and so protection is even tighter on most devices. In addition to having a user ID and password to authenticate a user’s identity, customers will also be sent a one-time password via text message that they must enter before they can log on.
Devices must be authorised by the account holder and will also have security in the hardware which means that if your phone is stolen, the thief will have to enter login details before they can access your data.
With stringent security checks and encrypted passwords in place your money is under no greater threat in the virtual world of online and mobile banking than it is in your local branch, you just have to ensure you’re as vigilant in the virtual world as you are in the real world.