Internet banking, understanding the benefits and risksInternet Banking

The world is not a risk-free place, 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 would anyone want to bank online?

  • Accounts can be viewed in real time from the comfort of your desk or mobile device.
  • Banking can be done 24/7/365
  • Payments can be set up, 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 get “lost in the post”
  • On many business accounts, electronic payments are free, but cheque payments incur charges
  • 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 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 to an invoice.

What are the risks?

The most significant concern is that the PC you use for electronic banking could be infected with a virus or other malware which could capture your account details and security information. Keyloggers, for instance, capture keystrokes and send the data to a third party who can access your online accounts.

Good quality antivirus and security software installed on machines that are kept up to date with service packs and security updates reduce this risk significantly.

With many accounts, you get some form of two-factor authentication 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 perform transactions, but neither can a criminal.

In comparison 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 scrambled, and if someone can listen in, they can get your card information. If you carry a chequebook 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 essential to follow the guidelines given by the bank to maximise safety.

For More Information

Please use the Contact us page or call us on 01525540041 or 02033271747

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