The answer is both yes and no. There are two types of online banking. The first type permits you to view your accounts online. This type of online banking I recommend. The second type of online banking permits you to schedule payments to payees from your bank account. This type I do NOT recommend.
Online Account Access
Viewing your credit card or bank account online s is a great way to monitor your accounts in real time . This enables you to detect fraud almost immediately. The faster you are able to detect fraud, the less time it will take to restore your account. Without online access you would have to wait 30 days to receive your statement in the mail. By then your account could have been completely cleaned out. Through online banking you can monitor your account anytime from anywhere.
Another benefit of accessing your accounts online is that you are able to take advantage of the account alerts. Once you set up an alert you will be notified, either through an email or text message, when a transaction has hit your account or if your account balance drops below a certain amount. Some credit cards offer “card not present” alerts. This notifies you of transactions where your credit card was not presented as in the case of online or over the phone purchases. The types of alerts vary so contact your financial institution for additional information. By using the alert functions you are able to detect fraudulent transactions before the thief has time to commit significant damage. You may even be able to detect it before the transaction has been processed and the funds have been withdrawn.
By setting up online access to your accounts you are preventing an identity thief from gaining access to your accounts online. The name of the game is the first one to set up the account wins. If you do not set up online access you are leaving yourself vulnerable to a thief setting one up using your credentials. The numerous data security breaches have exposed millions, if not billions, of sensitive information. This information is often sold on the personal identifying information black market. Once purchased thieves can use the data to contact your financial institutions and request access to online banking. This gives them full access to your account. Don’t let this happen to you. Simply set up access to your accounts online and block a thief from doing it on your behalf.
Bill Paying Through Your Bank
Paying your bills through your bank account is not something that I recommend. Here is why. Many financial institutions outsource bill paying to a third party. What this means is that the payment request goes from you to the bank, the bank to the third party, then the third party to the payee. Each step of the process creates another vulnerability for exposure. When it comes to online banking you want one-to-one transactions.
A one-to-one transaction occurs when you log in to your credit card account online and pay your bill. You will be required to enter your bank account information. Then pay your bill. The funds will be deducted from your bank account. This type of transaction is directly between your credit card company and your bank. Most of the time you receive a confirmation number instantly.
By setting up online access to your accounts you are blocking a thief from gaining online access to your accounts. You are also able to take advantage of monitoring and detection tools not available with any other type of service. In the digital age things move fast. The longer it takes for you to detect fraud, the longer the restoration process, and the greater the financial liability. Just make sure you implement basic security on your computer or smartphone before accessing your accounts online.
Implement Basic Security
To better protect your sensitive information you need to implement basic security. These are recommended for your computer as well as your smartphone and/or tablet, as applicable. Remember, smartphones and tablets are mini computers and are susceptible to the same types of threats as a desktop or laptop.
To protect your computer from malware, which is software with malicious intent, you need to use a strong anti-virus program. A strong anti-virus program offer real-time monitoring as well as automatic updates to the virus database. Many free versions do not offer these. Often you have to manually request an update or run a scan. You are better off paying for the upgraded automatic version. You may also want to look for a program that monitors your email for malware as well as the Internet for untrusted websites. The goal is to prevent malware from getting into your computer. In order to accomplish this you need to monitor and/or block all areas of vulnerability.
User Names and Passwords
Accessing your accounts online requires you to create user-names and/or passwords. Here are a few tips to make this process easier and safer.
- If possible, do not use your name or email address as your user-name
- Do not use the same user-name and password for all online accounts
- Use strong passwords including letters, numbers and symbols
- Store user-names and passwords in a secure location
- Change passwords often, six months recommended
Unsecured vs Secured Wi-Fi
Wi-Fi allows you to access the Internet from various locations. However, there are different types of Wi-Fi. Knowing the difference is important to your security.
The first type of Wi-Fi is free and unsecured. These are typically found at a local coffee shop, a hotel or other areas. With free unsecured Wi-Fi a password is often not required. In some cases a password/passcode is required but it is typically the name of the business, the word “guest” or posted in a public place. When you use this type of shared unsecured Wi-Fi anyone else on the network may be able to view your activity. Because of this you should never access sensitive information or enter a user-name and password when using free unsecured Wi-Fi. In other words, if you would not put it on a billboard on the highway do not view it or enter it on free unsecured Wi-Fi.
The other type of Wi-Fi is secured. This type requires a password that is provided on a limited basis. An example of this would be the Wi-Fi you use at work or in your Wi-Fi at home. If either one of these do not require a password you need to correct it immediately. Here the password is kept secure and is only given to those with a permissible purpose. How can you tell if the Wi-Fi signal is secured? Try to log on and if it asks for a password or passcode then it is secured. By using a secured Wi-Fi signal you are blocking unwanted access to the signal and your sensitive information. Only when using secure Wi-Fi should you conduct sensitive business such as accessing accessing financial accounts or entering your username and password.
While online actions do come with risk so do offline actions. If you pay your bills with a check in the mail there is a risk that your mail will be stolen or intercepted between you and the payee. In addition, you may be unaware that your payment was intercepted until you receive the next statement. The statement will show a late fee for non-payment. By then thirty days have passed and additional damage may have been committed by the thief. The decision to use online banking is yours. As with anything you need to weigh the risk to the rewards. You need to assess your risk comfort level and make the decision that is best for you. Me, I will be accessing my accounts online.