Banking internet
Online it here to stay Image Credit: Pixabay

We all bank online despite daily reports of hackers amid a contagion that is forcing us not to leave our homes. But is digital banking truly safe?

Online banking has grown increasingly popular especially since COVID-19, allowing one to skip trips to a branch and carry out a host of banking activities over the internet.

Online banking has grown increasingly popular especially since COVID-19

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Many of us probably would have banked online for years and probably is far from being new. My guess is you bank online, too.

Banking digitally grows increasingly popular during COVID-19 pandemic
Given the current pandemic situation wherein you are encouraged to bank from the safety of your homes as opposed to physically visiting your banks, it has been a boon for most.

Agreed you can bank online through online-only banks and the online arm of traditional banks and the approach does offer high interest rates on deposits.
New Digital Banking
The new digital banking experience is about agility, mobility, connectivity, efficiency and data Image Credit: Supplied

However, there are a series of risks one needs to keep in mind when banking online, one of them being that this has been known to complicate transactions that call for increased interaction with bank staff.

There are a series of risks one needs to keep in mind when banking online!

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How safe is it?

In many respects, online banking is more secure than traditional banking. Having your pay directly deposited into your bank account eliminates the risk of someone stealing your check from the mail.

Perks to banking online
No one can copy your account information from checks that you send to billers because bank computers send that information back and forth securely, and without storing it.

If fraud or errors occur during an electronic funds transfer, most governmental banking laws often protects you, as long as you act quickly.

Banking over the internet is generally safe as long as your deposits are insured. So, one needs to always make sure of bank provides guarantee over your accounts.
Mashreq Neo is the first digital bank to enable trading in foreign equities, gold and foreign currencies Image Credit: Supplied

Staying safe while banking online is relatively easy. The usual rules apply. Keep your computer and other devices up-to-date. In particular, ensure that the operating system, antivirus software, and firewall are current.

Staying safe while banking online is relatively easy.

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Use complex passwords, and never write them down. Finally, never respond to emails, phone calls, or text messages that ask you to provide sensitive account (or personal) information.

What are the risks to banking online?

Banks with physical branches but limited online banking still have their place for a few reasons.

Tech glitches turn frustrating in a pandemic
If you’re not comfortable with technology, banking online may not come to easy. Plus, glitches happen, and if your computer (or the bank’s) is down, you may have to put off a pressing transaction.

For complex situations like pesky customer service issues or discussions about different types of loans, you might benefit from a face-to-face meeting at a traditional bank.

It has also been becoming increasingly evident that tech glitches and customer service queries have been taking longer to resolve given the limited resources and conditions surrounding a pandemic.

Because of which frustrated customers are forced to either put it off or visit the bank directly – whenever it is possible that is or any easing is seen in virus-induced lockdowns.

digital banking
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Additionally, if you have other financial products with your bank beside checking or savings accounts, according to a survey by Avoka on digital sales of banking products, only about 24 percent of products such as loans could be accessed via mobile platforms.

Beware of online scams that are becoming increasingly rampant in a pandemic!
Scams such as phishing schemes that use your email or text to extract information or money from you are a reality.

But as long as you only send information to people you trust, and through websites you trust, you can avoid many of them. Be careful about what you click on, and contact your bank if you have any concerns.

Forced to make transactions in-person?

Despite the ability to withdraw cash through affiliated ATMs at online banks, banking online may be impractical if you frequently make large deposits or withdrawals and need to do so through a bank teller.

Banking online may be impractical if you frequently make large deposits or withdrawals

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Payfort e-commerce online digital payments UAE dubai
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Traditional banks can also provide notary services, safety deposit boxes, and official checks in an instant. You might not need those services often, but when you do, it’s typically during an important event when time is of the essence.

Online-only banks that lack physical branches don't offer these services typically. However, a traditional bank with robust online banking might.

Traditional banks can also provide notary services, safety deposit boxes, and official checks in an instant.

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Evaluate whether your bank offers them, and if not, whether it makes sense to keep an account open at a bank with physical branches to use these services.

Given the rare instance of where movements are restriced due to a virus outbreak, like the one we are in currently, being faced with situations like this is why this constitutes as another risk tied to banking online in a pandemic.

Change in approach towards customers
Although it is not what it was when digital banking first began and has evolved exponentially, you may occasionally have trouble with customer service.

With a brick-and-mortar bank, you’ll likely have some familiarity with the staff, and even at a small financier, the staff might know you well.

If you’re the type of person who enjoys the personal interaction, it’s easier to find that at a brick-and-mortar institution.
Digital banking
As consumers seek speed and convenience, it is not enough for banks to woo them with nice-looking apps Image Credit: Supplied

Sometimes problems are easier to solve in person. If there is a mistake somewhere, a face-to-face discussion may be the most effective way to make progress when things are confusing.

Sometimes problems are easier to solve in person, if there is a mistake somewhere

- A face-to-face discussion may be the most effective way!

You won’t have to wait on hold and deal with an “escalation” process when everybody can sit down together and figure things out.

Staff at a brick-and-mortar bank branch matters!
The staff at a brick-and-mortar bank branch matters, because it’s easier to get good service if you know them, they know you, and they know what you typically do with your accounts.

You can pick and choose who you deal with if you’re familiar with the employees, if there isn’t somebody there who you like working with.
Mashreq Neo is targeted at the connected generation who are digitally savvy and use mobile devices extensively Image Credit: Shutterstock

Banks with too-good-to-be-true terms?

When forced to venture into online banking, a simple internet search can reveal thousands of online-only banks you’ve probably never heard of offering high interest rates accounts with very little deposit required.

The problem with this is that you are putting your personal information, and your money, in danger by signing up for banks with unrealistic terms.

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#BEWARE: Do you see accounts offering high interest rates and minimal customer service?
Be leery of any account offering high interest rates and very little customer service. These firms may only exist to steal your information, and will disappear when they’ve done that.
190807 hackers
For illustrative purposes only. Image Credit: Supplied

Let’s look at such trouble makers in detail next.

Never-ending fraudster, huckster, hacker trouble

With its increased usage, however, online banking is becoming an increasingly attractive target for hackers. It has been especially been observed that hacking has quadrupled since the onset of the latest virus outbreak.

The reality is that over the recent years, major banks have been the prime targets of hacking attacks.

Some well-publicized bank hacks!

First American Financial Corp., a US-based real estate and mortgage insurer, revealed in May 2019 that it left 900 million sensitive customer files exposed.

In 2012, Iranian hackers were reportedly targeting Citigroup, Bank of America and JP Morgan Chase.

When the hacks were finally reported, we learned that the attacks had been going on for close to a year even though customers have been complaining about how difficult it was to access their accounts.
Hacking Image Credit: Stock photo

These are just a few well-publicized instances. Although hacks as major as these are rare, research has often shown that the reality is banking websites are hit by hacking attacks almost every single day.

While that may be unsettling to hear, there is a silver lining. As a result of these attacks, banks continually improve their systems to effectively deal with such attacks.

Even if hackers, hucksters or fraudsters are able to steal money from your account, you will most likely be protected!

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If you safeguarded your personal information and reported the loss immediately, the bank is very likely to reimburse your account, according to Bankrate.

phishing, hacking, hacker, cybercrime
Image Credit: Pixabya
Key takeaways!
There are several reasons to consider online banks: they offer an easy way to bank for free, they're your best bet for finding high-interest rates, and they usually make life more convenient in other ways.

You may never run into any of the problems mentioned above, and your overall experience will probably be great, but you should have a good idea of what to expect.