How safe is Online Banking? Different Types of Online Banking Risks

This article is all about the safety and security of online banking. Yes, you heard it right! How safe is online banking? When we go for any monetary transactions or transfer money, we must keep in mind, it's our hard-earned money. We don't want any authorized person to access our account and siphon the amount. We have to be cent percent sure, that our transactions are safe. Online frauds have become a major cause of concern for the customers.

A lot of customers have been at the receiving end and have lost a fairly substantial amount while doing online banking. Primarily they have been fooled on account of the fact, that they have not maintained and adhered to the necessary guidelines issued by their concerned banks.

In most of the cases, the customers have been hoodwinked into believing something which was not the actual fact. Hackers know how to manipulate technical things and they are quite smart in reading our minds and accordingly they pitch the story to their advantage in such cases.

Whatever may be the reason, the hackers will try to exploit the system and attack the banking websites almost on a regular basis. This compels the bank authorities to keep their guard up.

Since banks do not want these hackers to sneak through and run away with your money, therefore, the concerned authorities keep on upgrading the system to keep it away from the reach of hackers. Bank keeps on improving their systems to effectively deal with such attacks.

Assuming somehow the hackers manage to access your account, you are still likely to be protected. Keep your personal/confidential information protected and you got to immediately report the loss. According to Bankrate, if you do the needful as stated above, you are likely to be reimbursed.

There is also a provision which states, that bank needs to reimburse such amounts if reported within a period of 60 days. Of course, nobody wants to experience such a scenario in the first place, but even if you get subjected to the same, by doing the needful you can still recover the money which surely will act as a relief to the victim.

It becomes imperative to mention, that such coverage does not take into consideration institutional depositors. In case, your account is under your business name then in that event, you will neither receive any relief nor will be covered by this protection.

You can't afford to be casual or complacent while doing online transactions. Since you own the amount you have kept into your bank account, therefore, to a great degree the onus lies on you at least to follow the guidelines prescribed by your own bank and exercise utmost caution during online banking. You must follow/ observe certain best practices while using online banking services.

Banking policies have been formulated for the betterment of customers. Bank will support you as much as they can, but it's better to be cautious. As they say, precaution is better than cure. So you got to be alert, vigilant, and above all responsible while going for online banking. It's not easy to hack your account so easily. The banking system is not so vulnerable.

Does it mean, you can relax? Absolutely not. You have to be cautious. This is how you can discourage hackers. Nothing is foolproof, but loopholes will be very minimal as good as nil when we talk about the banking system and even if there are any loopholes, the same gets plugged by the banking officials.

There is no need for you to be worried about your money till the time you play safe while doing online transactions. As long as your money is with a bank, rest assured it is in safe custody. Yes, while doing banking transactions in online mode, it is expected that you will be cautious. Do this much, online transaction is as safe and secure, as manual transaction then.

Before proceeding ahead, let's find out the various types of attacks that are prevalent. It is essential for us to understand the risk factor since it is all about our money.

Different Types of Online Banking Risks

There are as many as 4 different types of attacks. Let's go through each one of them.

1. Phishing-Online Banking Risks

Perhaps the most common online hacking methodology is none other than Phishing. The hackers adopt a simple methodology for this purpose. You will be asked to click on a link in an email message. The moment you click on the same this link will download software for the purpose of collecting all your valuable and confidential information including your password and user name.

Unknowingly by clicking on a simple link, you have landed into a soup. It has been also observed in some cases, these links take the user to a website that appears legitimate, and then the website asks for certain key information which eventually enables the hacker to access your account. Such links must be ignored if you ever receive one. It's a trap, never ever get into it.

2. Identity Theft-Online Banking Risks

This is another form of theft. The idea is to steal your information. The information could be in the form of your account details, social security number, or for that matter any other relevant information which could be used by the hackers to hack into your other accounts.

There are various ways by virtue of which identity theft can take place. Your social security number and other confidential information can be comprised with. It can be obtained by an unauthorized person called hackers if you get complacent while being online. Be watchful.

It will be wrong on our part to think that, we are safe offline. Offline mode also makes you vulnerable to such attacks. Thieves can steal your wallet and may end up accessing information that is precious in the context of your financial safety and security.

3. Keylogging-Online Banking Risks

Certain users are not aware of the risk factor associated with accessing the internet, especially while doing online transactions in internet cafes or public Wi-Fi services. It's a huge risk to do online transactions from such places. The reason being, you might fall prey to keylogging. Keylogging takes place using video cameras meant to record your keystrokes or else it employs software to record your keystrokes enabling the hackers to access your account.

4. Pharming-Online Banking Risks

Another form of attack although considered more difficult for a hacker is known as Pharming. For this kind of attack to take place, hackers need to hijack a bank's URL. Subsequently, when we try to access our bank account we get redirected to another site and this site appears to be the actual site which is not the case in reality. As stated above, this form of attack or manipulation is difficult to carry out however, we must remain as alert and vigilant as we can.

How to Deal with such Online attacks?

You must be wondering, how to deal with such attacks? Well, it is undoubtedly a genuine and meaningful question in the light of this situation as it involves your money as well as personal information. The Federal Deposit Insurance Corporations ( FDIC), has issued an advisory or set of rules and regulations to be followed by the customers. These steps must be followed in its totality.

1. Authorization

You will come to know whether your bank is legitimate (Authorized) by going through the information found on the site. Not only this, it will help you to know whether your bank is insured with FDIC. FDIC has a tool to guide you and search for banks. So this point must be kept in mind.

2. Used Trusted Web sites

You might end up visiting a site that gives you an impression, that it is the original site since it looks similar to your online bank. So exercise caution and be cent percent sure that you have accessed the right and legitimate platform.

At times, you might receive an email stating that it has been sent from your bank, never ever commit the mistake of clicking any links in the email rather type in the URL of your bank and login. Remember, in case your bank is trying to communicate or contact you, in that event, you are likely to receive a message when you access your account. Call the number on the bank of your debit card. This seems a far better and secure option, instead of falling prey to such frauds.

3. Know about your Bank’s Security System

It is of immense importance for you to know and learn as much as you can, pertaining to your bank security system. It is advantageous for you to know, how does your bank encrypts your private information?. While accessing your website, you should find a small "lock" or "key" icon indicative of the fact, that your transaction and site are secure.

You should be able to use your PIN and password when you access your account online. Avoid sending personal information via emails. Having full-fledged information and knowledge always helps to ensure safety and security, which holds the key while dealing with such sensitive matters.

4. Protect PC

Hacking attacks are directed towards banks as well as customers in some cases. As a customer, it is advisable, you should use the latest malware screening software or the latest virus on your computer. Make it a point to ensure, that all the software which are in use on your computers, must be patched with the latest security updates. You must be aware of the fact, that certain banking websites give you the option to "remember your computer". Don't opt for it. It lets the hackers spoof your IP address and will disguise the bank and they will consider the hacker's computer as yours. The risk element is too high in such cases.

Conclusion

As evident from this article, online banking has certain demerits however, these factors come into play if the user is not having sufficient information and is not willing to exercise necessary precautions. If you take the right steps and measures mentioned in this article then your account will not be easily accessible by any unauthorized person.

By being alert and vigilant and keeping your guard up you can make it almost impossible for hackers to cheat you and steal your money online. The people, who are not aware or well informed on such issues are the ones who are likely to be targeted more easily. Don't fall into such a trap. Online banking is safe enough provided the customer is equally concerned about his or her money and gives utmost importance to the safety and security of their bank accounts.

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