Online banking: how to increase your security

More and more business is conducted online each year. Online banking (or eBanking) describes banking over the internet. This includes bill pay, transfers, electronic statements, and general account management.

Customers are no longer limited by the bank's hours of operation. Today, it is quite normal for a person to conduct all of their banking online (pay bills, transfers, savings, etc...).

That said, many people still don't use online banking because they think it's not dependable enough. This is not necessarily true. Only a very small percentage of online bankers are victims of an online bank crime each year. It certainly goes without saying that if an online banker is gullible or not familiar with computers, they are more likely to fall victim.

While the world of eFinance offers a huge convenience over old "drive-to-the-bank" banking, it comes with its own set of security and privacy issues.

Make sure you have a strong and unique password. Password strength is the single most important thing you can do to make certain your identity and finances are safe and secure. To learn more about password strength and how to make a strong password, click here. It doesn't make any sense for you to use the same password for your high security Bank of America account that you do for your low security Netflix account. Commonly, hackers will crack a low security account password then go find out if the person is ignorant enough to use it for all their other accounts. Are you? About 20% of the country commonly does this.

When you enter your information, make sure it is through a secure web protocol (https). A secure protocol encrypts all the information sent from your browser window to the website, ensuring no person can intercept, read, or manipulate your information. This secure web protocol still does not protect the online banker from spyware or keyloggers.

To increase security, banking services commonly use a second layer of security. One method is to use one time banking passwords, called transaction numbers or TANs. Another method is called two-factor authentication. It is currently used in the European Union and was more recently adopted by PayPal, to issue a physical token code device to all customers, and when a customer wants to conduct a transaction, they must put in the current code from this security device.

Recent laws for banking in the United States require extra security, so more U.S. banks now send cookies that recognize a user's computer. Should it be the user's first login, the website will ask a number of difficult identity questions to confirm the correct user.

Last but not least, watch out for phishing attempts with your online banking. Phishing is a type of fraud where another person coerces personal information from someone else. Identity theft and bank fraud have occurred because of phishing. Be sure to only answer financial and personal information requests that you directly initiated. If you didn't initiate the contact, forget it. If it's questionable, get out your last statement (not their provided number!), and give your bank a call.

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