The world is not risk-free, and the Internet has introduced new risks. One of those things people worry about is the safety of Internet Banking.
Like everything else, a good understanding of the risks and taking all reasonable precautions should be enough to enable most people to make an informed decision about banking online.
Why bank online?
- You can view accounts in real time from the comfort of your desk or mobile device.
- Access to banking services 24 hours a day, 365 days a year.
- Set up, change or cancel payments whenever you like
- You don’t have to wait in a call queue to speak to someone in a call centre
- Cheques don’t have to be written and taken to the postbox
- Not having to pay postage costs.
- Payments can’t get “lost in the post.”
- On many business accounts, electronic payments are free, but cheque payments incur charges.
- For some transactions like VAT, you get slightly longer to pay or even a discount.
Why do companies want to be paid electronically?
- Cheques are never “lost in the post.”
- Some business accounts charge fees to pay in a cheque. Barclays bank charges us £1.50 to pay in a cheque.
- Funds are credited as cleared funds, whereas with cheques, you have to wait a minimum of 4 working days.
- You don’t have to spend your time and money going to the bank
- On statements, a reference provided by the payee helps cross-reference an invoice
What are the risks of Internet banking?
The most significant concern is the security of your electronic banking device. A computer infected with malware can capture your account details and security information. Keyloggers, for instance, capture keystrokes and send the data to a third party that can access your online accounts.
Good quality antivirus and security software installed on machines that are up to date with service packs and security updates reduce this risk significantly. Some anti-virus products include additional features to make online banking safer.
Out-of-date operating systems like Windows 7, which no longer receive security updates, increase the risk.
With many accounts, you get a two-factor authentication device in which you have to insert your bank card and enter your pin. The device issues a code that has to be entered into the online transaction for it to complete. Without the bank card, the device and the PIN, you cannot perform transactions, nor can a criminal.
Compared with online banking, giving out card information on the phone is a higher risk as you don’t know who you’re giving it to or what they are doing with it. Ordinary phone lines are not secure, so if someone can listen in, they can get your card information. If you carry a chequebook, someone might steal it and use it or your identity.
In summary, there is a risk with everything you do, but with e-banking, if you keep your machine updated and use good quality antivirus software, use a bank account that provides some form of hardware security, the benefits far outway the risks. It is essential to follow the guidelines given by the bank to maximise safety.