Weakness of Online Banking

Many people have concerns about the safety of conducting their banking online. One of the biggest concerns that customers cite, when it comes to online banking, is the possibility of an account hack which will expose their sensitive banking information – and even their accounts – to identity thieves. Hackers may use such techniques as “phishing” attacks, keystroke logging, and man-in-the-middle attacks to disrupt servers or record banking information from customers. Most banks have taken measures to protect their customers from this sort of activity, but it is still a perception problem. In fact, a recent survey cited that 64% of the customers polled felt that it was “somewhat difficult” or “not at all difficult” for a hacker to access their online banking account (Harris Interactive, Dec 2008).

This does not mean that online banking is not safe, if both the institution and the customer are doing it correctly and are aware of the dangers. In fact, online banks argue that the elimination of paper records actually helps to keep your information safe. The majority of financial fraud happens in the “real world,” when paper records are stolen, or you use your card at a retail location or even the gas station. With electronic statements saved to your computer hard drive, online banks argue, you reduce the chances of having your sensitive banking information plucked from a trash dumpster by an identity thief.

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Banks have also taken steps to ensure that they respond quickly any time there is suspicious activity on your account. Some banks also offer a service that sends you email alerts when large sums of money are being withdrawn from your account, or if your bank balance is low. Features such as this, as well as the ability to check your statement online at any time can help you guard against fraud by allowing you to react immediately to any suspicious activity on your account.

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