Internet Banking
The world is not a risk free place and the Internet has introduced new risks to worry about. 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 on line.
Why would anyone want to bank on line?
- Accounts can be viewed in real time from the comfort of your own desk
- Banking can be done anytime you like
- Payments can be setup, changed or cancelled whenever you like
- You don’t have to wait in a queue to speak to someone in a call centre
- Cheques don’t have to be written and taken to the post box
- Payments can’t be lost in the post
- On many business accounts electronic payments are free but cheque payments incur charges
- On some payments like VAT you get slightly longer to pay or even a discount
Why would companies want to be paid electronically?
- Cheques are never “lost in the post”
- On some business accounts you incur fees to pay in a cheque
- Funds are credited as cleared funds whereas with a cheque you have to wait minimum of 5 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 to an invoice.
What are the risks?
The greatest concern is that the PC you use for electronic banking is infected with a virus or other malware which could capture your account details and security information. Key loggers for instance capture key strokes and send the information to a third party who can misuse this information at will.
Good quality antivirus and security software installed on machines that are kept up to date with service packs and security updates reduce this risk greatly.
With many accounts you get some form of device which you have to insert your bank card and enter your pin. The device issues a code which has to be entered into the online transaction for it to complete. Without the bank card, the device and the pin number you cannot make transactions and neither can a criminal.
In comparison with online banking, giving out card information on the phone is a greater risk as you don’t know exactly who you’re giving it to or what they are doing with it. Ordinary phone lines are not scrambled and if someone can listen in they can get your card information. If you carry a cheque book about 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 which provides some form of hardware security, the benefits far out way the risks. It is important to follow the guidelines given by the bank to maximise security.