Guide to Online Banking Security

Updated: September 5, 2024

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Online banking offers the convenience of managing finances anytime, anywhere — from checking balances to making payments. This ease of access has made online banking a popular tool for many, but it comes with risks concerning the security of your banking data, such as phishing, malware and unauthorized access.

Banks implement advanced security features like encryption, two-factor authentication and fraud monitoring to protect customer information, but relying solely on these measures may not be enough. You can also take proactive steps to enhance your security and ensure your financial data remains protected while banking online.

PREVENTIVE MEASURES FOR ONLINE BANKING SECURITY

Here are some key steps you can take to protect your data while online banking:

  1. Create strong and unique passwords
  2. Enable multi-factor authentication (MFA)
  3. Set up banking alerts
  4. Avoid public Wi-Fi for banking
  5. Install and update antivirus software
  6. Stay alert for phishing scams
  7. Log out after banking
  8. Keep your devices updated
  9. Be mindful of your surroundings

9 Security Measures to Enhance Online Banking Safety

Protecting your financial data while banking online requires a combination of using your bank's built-in security features and implementing your own protective measures. Here are preventive measures to avoid bank fraud, reduce the risk of unauthorized access and ensure your online banking experience remains safe and secure.

1. Create Strong and Unique Passwords

Your password is the first defense against unauthorized access to your account. A strong, unique password can significantly reduce the risk of being hacked. A password manager, such as 1Password or Keeper, can help you generate complex passwords and securely store them. Regularly update your passwords every three months and avoid reusing them across multiple accounts.

You can follow these tips to create strong and secure passwords:

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    Use Longer Passwords:

    Aim for passwords at least 12 characters long. Avoid using a single word or short phrase.

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    Mix It Up

    Use a combination of uppercase and lowercase letters, numbers and symbols. Avoid predictable sequences like "1234" or "abcd."

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    Avoid Personal Information

    Don't use easily guessed information such as birthdays, names or pet names.

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    Don't Store Passwords in Browsers or Apps

    Do not save your login details in your online banking browser or mobile app for added security.

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    Keep Passwords Private

    Never write passwords on your card or in your wallet where they can be easily found.

2. Enable Multi-Factor Authentication (MFA)

MFA, or two-factor authentication (2FA), is a security measure that requires you to verify your identity using two or more methods before accessing your account. Although a password is something you know, MFA adds an extra step by requiring something you have on your person. For example, after entering your password, you might be asked to enter a code sent to your mobile device or use biometric verification like a fingerprint.

The purpose of MFA is to provide an additional layer of security. Even if someone obtains your password, they would still need the second factor — such as your phone or fingerprint — to gain access, making it much more difficult for unauthorized users to breach your account. Here's how you can enable MFA:

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    Activate MFA in Your Account Settings

    Log into your bank's online platform or mobile app and navigate the security settings. Look for the option to enable MFA.

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    Choose Your Authentication Method

    Select the type of MFA that best suits your needs. Options often include receiving a one-time code on your mobile device, using biometric verification (like fingerprint or facial recognition) or employing a physical security key.

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    Regularly Update Your MFA Settings

    Periodically review and update your MFA settings to ensure they provide the best protection. This may include changing your authentication method or refreshing your backup options.

3. Set Up Banking Alerts

Banking alerts are notifications your bank sends to inform you of specific activities on your account. Banking alerts can be delivered through email, text or push notifications. These alerts can help you monitor account activity in real time, providing immediate updates when specific actions such as transactions, account setting changes or low balances occur. When choosing a bank, consider their alert options, as most banks provide various customizable alerts based on your preferences.

To set up banking alerts, log into your bank's online platform or mobile app and navigate to the alert settings. Recommended alerts include notifications for large transactions, failed login attempts or changes to personal information. If you receive an alert about a transaction you don't recognize or a change to your account settings you didn't make, take immediate action:

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    Contact Your Bank

    To report suspicious activity, call your bank's customer service or use their online support.

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    Freeze Your Account:

    Many banks allow you to freeze your account temporarily to prevent further unauthorized transactions.

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    Change Your Password

    Update your account password and review other security settings, such as MFA, to ensure your account remains secure.

4. Avoid Public Wi-Fi for Banking

Public Wi-Fi networks — such as those in cafes, airports or hotels — are often less secure than private home networks. Anyone can easily access these public networks, including cybercriminals who may use them to intercept your data. When you use public Wi-Fi for online banking, you risk exposing sensitive information — such as your login credentials and financial details — to potential hackers.

A secure, private Wi-Fi connection at home is ideal for online banking because it's typically protected by stronger encryption and security measures less vulnerable to outside threats. If you need to access your bank account while away from home, there are steps you can take to minimize risk:

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    Use a Secure, Private Wi-Fi Connection

    Connect to a trusted, secure Wi-Fi network whenever possible. Your secured personal hotspot is preferable to public networks.

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    Consider Using Mobile Data

    Mobile data networks are generally more secure than public Wi-Fi. If available, use your mobile data plan to access online banking rather than connecting to public Wi-Fi.

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    Use a Virtual Private Network (VPN)

    If you must use public Wi-Fi, consider using a VPN to encrypt your internet connection. A VPN creates a secure tunnel for your data, making it more difficult for cybercriminals to intercept your information.

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    Avoid Accessing Sensitive Information

    If it's not urgent, wait until you can connect to a more secure network before accessing sensitive information, such as your bank account, on public or unsecured networks. If you must access your account, ensure the website's URL begins with "https://" (as opposed to “http://”). This indicates that the website uses a secure, encrypted connection, which helps protect your data from being intercepted.

5. Install and Update Antivirus Software

Cybercriminals are constantly developing new types of malicious software designed to commit identity theft or gain unauthorized access to your accounts. Antivirus software can protect your devices from malware, viruses and other online threats that can compromise your banking information. Here's how to safeguard your devices with antivirus software:

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    Install Reputable Antivirus Software

    Choose a well-known and trusted antivirus program and install it on all your devices, including computers, smartphones and tablets.

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    Keep Your Antivirus Software Updated

    Regularly updating your antivirus software is just as important as having it installed. Enable automatic updates to ensure your software has the latest virus definitions and security patches.

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    Run Regular Scans

    Schedule or manually run regular scans of your devices to detect and remove malicious software. Regular scanning helps identify and eliminate threats before they can cause harm.

6. Stay Alert for Phishing Scams

Phishing scams are deceptive attempts by cybercriminals to trick you into revealing personal information, such as your banking details, passwords or credit card numbers. These scams often appear in different forms, including fraudulent emails, text messages or phone calls that seem to come from legitimate sources, like your bank or a trusted organization. The goal is to lure you into providing sensitive information or clicking on malicious links that can install harmful software on your device.

For example, you might receive an email that looks like it's from your bank, asking you to "verify" your account information by clicking a link. The link could take you to a fake website that looks identical to your bank's site, where you are prompted to enter your login credentials. Once entered, the scammers capture your information.

Phishing attacks can be sophisticated and difficult to spot. However, understanding how they work and taking the following precautions can help protect your personal information:

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    Verify the Source

    If you receive an email, text or phone call requesting sensitive information, always verify the sender's legitimacy. You can contact your bank or the organization directly using a known, trusted method, such as calling the number on their official website.

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    Avoid Clicking on Suspicious Links

    Never click on links or download attachments from unknown or suspicious senders. These could lead to fraudulent websites designed to steal your information or install malware on your device. Before clicking, you can hover over links to reveal where they will take you.

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    Report Suspected Phishing Attempts

    If you suspect a phishing attempt, report it immediately to your bank or the relevant authorities. Many banks have specific channels for reporting phishing, and doing so can help prevent others from falling victim to the same scam.

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    Never Share Personal Details

    Always be cautious about sharing personal information, especially through unsolicited communications. Legitimate organizations will never ask for sensitive information via email or text.

7. Log Out After Banking

After completing your online banking tasks, log out using the designated button. This action ensures that your session is fully closed. Simply closing the browser window or app may not terminate your session, which could allow someone else to access your account if they open the browser or app again. Regularly clear your browser's cache and cookies, especially if using a shared or public device. This helps remove any stored information that somebody could use to access your account.

8. Regularly Install Updates to Your Devices

Software updates often include patches for newly discovered security flaws and enhancements that improve your device's overall security. Failing to update your operating system, apps or security software can expose your device to potential threats. You can set your operating system, apps and security software to update automatically. This ensures you receive the latest security patches and features as soon as they're available without remembering to update manually. Even with automatic updates enabled, it's a good idea to periodically check for and install any available updates on all your devices, including smartphones, tablets and computers.

9. Be Mindful of Your Surroundings

When accessing your bank account in public places, be aware of those around you who might be trying to observe your activities. Public spaces can expose your sensitive information to prying eyes, making it easier for someone to steal your data. Taking simple precautions can help protect your information from being compromised:

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    Shield Your Screen

    When entering passwords or viewing sensitive information, position yourself so your screen is not easily visible to others. Use your body or hand to shield the screen from onlookers.

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    Be Cautious of "Shoulder Surfing"

    "Shoulder surfing" occurs when someone watches over your shoulder to steal your data. Be aware of your surroundings and ensure no one looks over your shoulder while you access your accounts.

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    Use Privacy Screens or Filters

    Consider using privacy screens or filters on your devices. These accessories limit the viewing angle of your screen, making it difficult for anyone nearby to see what you're doing.

Security Features to Look for in Online Banking

When opening a bank account, choose a bank that has an online banking platform with security features in place to protect your financial information. While most banks offer robust security measures, understanding what to look for can help ensure your data is well-protected. Here are key security features to look for:

1
Encryption

Encryption is converting your data into a code to prevent unauthorized access. Look for banks that use strong encryption methods, such as SSL (Secure Sockets Layer) or TLS (Transport Layer Security), which ensure that your data is securely transmitted between your device and the bank's servers.

2
Fraud Detection and Alerts

A good online banking platform should have fraud detection systems to monitor your account for unusual activity. These systems can automatically flag suspicious transactions and notify you immediately through alerts, allowing you to take quick action if needed.

3
Secure Login Methods

Look for banks that offer secure login methods, such as biometric authentication (fingerprint or facial recognition) or physical security keys. These methods provide an additional layer of security beyond traditional passwords.

4
Account Monitoring Tools

Some banks offer tools to monitor your account activity in real-time. These tools can help you quickly identify any unauthorized transactions and take action to secure your account.

5
Automatic Logout

Automatic logout features ensure that your online banking session is closed after a period of inactivity. This prevents unauthorized access if you forget to log out manually.

6
Customer Support and Fraud Resolution Services

Reliable customer support and efficient fraud resolution services are essential. Ensure that the bank provides quick and effective assistance in the event of suspicious activity or fraud.

FAQ: Online Banking Security

Below are answers to some common questions that can guide you in ensuring your online banking experience remains secure.

Is online banking safe?
What is online banking security?
What is the biggest danger of online banking?
What steps can you take if you suspect your online banking account has been compromised?

Additional Resources

For more information on online banking safety and protecting your financial information, consider exploring the following trusted resources:

  • Better Business Bureau (BBB) Scam Tracker: A tool that allows consumers to report and track scams in their area, helping to raise awareness and prevent others from falling victim to fraud.
  • Consumer Financial Protection Bureau (CFPB): Offers tools and resources to help consumers manage their finances, avoid fraud and make informed decisions about financial products and services.
  • Federal Trade Commission (FTC): Provides a wide range of resources on consumer protection, including advice on avoiding scams, protecting personal information and understanding your rights.
  • Federal Deposit Insurance Corporation (FDIC): Offers educational materials on financial literacy, consumer protection and the importance of cybersecurity in safeguarding personal and financial information.
  • Identity Theft Resource Center (ITRC): Provides comprehensive resources for protecting against identity theft, including prevention tips, recovery assistance and educational materials on safeguarding personal information.
  • National Cyber Security Alliance (NCSA): Focuses on promoting cybersecurity awareness and education, offering resources for individuals and businesses to protect themselves online.

About Nathan Paulus


Nathan Paulus headshot

Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.

Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.