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Modern Banking: Keeping Your Data Safe Online

June 01, 2015
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The times, they are a-changing, and increasingly we are trusting the Internet with our most personal data. This makes our lives easier in many ways. However, with the potential for accounts to be hacked, safe banking online requires consumers to make wise decisions about how they use the Internet to avoid costly mistakes and scams.

Banking over the Internet isn't something to avoid. It's cost-effective, fast, and incredibly convenient. However, if you have access to your financial data online, there is a risk for others to gain access as well. As consumers, we need to know what we are up against and how to protect our finances from potential dangers.

Make Informed Choices About Where and How You Bank

The FDIC offers great information about online banking safety. Some areas it recommends focusing on initially include:

  • Knowing your consumer rights.
  • Ensuring the bank is a legitimate location and that your deposits are FDIC insured (by checking for the FDIC logo or the words "Member FDIC" or "FDIC Insured").
  • Make sure the site provides a way to keep your personal information secure (through data encryption and password protection).

It's important to do your homework when selecting an online bank, especially one with which you are unfamiliar. Ideally, any bank you deal with online will have a brick-and-mortar location as well. This provides consumers with the convenience of online banking but also legitimacy and the capability to get instruction and service from another human being as well.

Fraudulent websites are another concern — sometimes predators buy a web address similar to a bank's and take advantage of consumers who don't recognize the difference. Double check the web address for accuracy before providing any sensitive information. Due diligence will help you avoid problems in this area.

Protect Your Passwords

Every smart financial services website will require users to have a password. If not, they shouldn't be trusted with your personal financial information. Choose passwords carefully. Ensure it is a strong one based on a combination of letters and numbers, preferably that are random.

Neil J. Rubenking writes a column called SecurityWatch for His brilliant password recommendations include,

"Consider using a password that's an entire sentence, something with personal meaning. You'll have to practice typing without spaces, but after a while typing a password like JFK.1989.AskNotWhatYourCountryCanDoForYou! or Obama.2008.Yes,WeCanChange will come naturally."

He also notes,

"When you go to add numbers, don't use your house number, phone number, SSN, or anything a stranger could associate with you. Use a phrase or sentence that has personal meaning and you'll wind up with a password that's both memorable and unguessable."

In a separate article, Rubenking recommends using a password manager tool to make remembering your passwords easier to do. This secure method allows you to prevent identity theft, but also doesn't require you to remember several 7-digit long passwords with random letters.

Ensure You Use Your VPN

It's a bad idea to connect to an unknown or unsecured network and do your online banking. There is no way for you to know who is watching that network. If you are in a public area and need to use such a network, connect through a Virtual Private Network, or VPN. There are free options available and paid-for varieties available (Rubenking makes a few recommendations). This process changes your IP address and keeps others out of your private access. Keep in mind, though, the bank's website (if designed to be completely secure) will likely ask you to verify your account even if you are using the same computer you always use.

At the end of the day, you need access to online banking and mobile banking. For the sheer convenience, as well as access when you're abroad or unable to leave home, you shouldn't go without it. If you take the time to protect your personal data and private information from those who would like to steal it from you, you can substantially mitigate the risks. Keep these tips in mind and you can bank happily and securely over the Internet.

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