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Summary: Is Online Banking Safe?
Online banking is quick and convenient — but it comes with certain risks such as malware, phishing, credit card scams, fake apps, and more.
We recommend you take the following measures to stay safe when banking online:
- Use a good password manager to help create a strong password and change it often.
- Set up two-factor authentication for your online bank accounts.
- Sign up for text and email alerts from your bank.
- Avoid banking when on public Wi-Fi, which may not be secure and could leak your private information.
- Use a VPN to encrypt your internet connection and add a layer of security.
We recommend NordVPN for online banking, because it offers the best security at a great price point. NordVPN consistently topped the VPN speed and security tests conducted by VPNOverview.
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For all the details about the risks of online banking and how to stay safe, read our full article below.
Online banking makes managing your money from anywhere easy and convenient. But like all online activities, online banking carries several risks, such as fraud, scams, identity theft, data breaches, and more.
In 2022 alone, the U.S. Federal Trade Commission (FTC) reported receiving 2.2 million fraud reports and estimated $8.8 billion in losses. Meanwhile, in the UK, more than £609.8 million was stolen through bank fraud in the first half of 2022, according to UK Finance.
These figures beg the question: are online banks safe at all? Or should you avoid them completely? How do you mitigate the risks of banking online? Below, we discuss the risks of online banks and the key to secure online banking.
Is Online Banking Safe?
Yes, online banking can be safe if both you and your bank take security measures to avoid fraud and cybercrime.
Most financial institutions invest heavily in protecting their customers. In the UK, the Contingent Reimbursement Model Code encourages banks to reimburse customers who end up sending money to fraudsters. Though subscribing to this code is voluntary, banks can still be subjected to complaints sent to the Financial Ombudsman Service.
There are also laws and regulations in place that criminalize fraud and cybercrime, and governments typically have systems in place for monitoring fraud. For instance, the U.S. FTC offers an online portal for those who wish to report fraud.
As mentioned, however, while such measures help in keeping customers safe when banking online, individuals should still protect themselves against the risks of online banking. The easiest way to do that, is to install the right tools:
- Antivirus software to protect you from malware and computer viruses
- A VPN to protect your banking data from hackers and cybercriminals
- A password manager to keep your passwords secure
We recommend NordVPN Complete for anyone trying to get a grip on safe online banking. It will keep your connection secure, give you basic malware and tracking protection, and allow you to store your passwords with NordPass.
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What are the Risks of Online Banking?
The first step to safe online banking is being aware of the risks. Below, we’ve summarized some of the risks faced by your online bank accounts.
Malware refers to software that infects devices like computers, tablets, and smartphones. Malware comes in many forms. Here are just a few types of malware:
|Type of Malware||Description|
|Keylogger||Keyloggers save your login details as you type them, which aids in identity theft.|
|Ransomware||Ransomware incapacitates your computer by taking all your files “hostage” until you meet the demands of the malware distributor.|
|Spyware||Spyware steals sensitive financial and personal details from your device like your banking details, then transmits them to cybercriminals who can use this information for fraud.|
|Trojan||Trojans grant cybercriminals access to a victim’s computer and are distinct from other types of malware by being distributed disguised as a different program|
Ransomware, in particular, has proven to be a serious problem in recent years. In 2021, U.S. banks reportedly processed around $1.2 billion in ransomware payments, a significant rise from $416 million in 2021. Cybercriminals pressure banks into paying huge sums, threatening to leak sensitive user data if the bank doesn’t pay the ransom.
Needless to say, the dangers described above come with huge financial implications. Fortunately, you can combat malware infection with your choice of antivirus software.
We regularly test antivirus programs to identify the best software for your device. Topping our list of the best antivirus programs are Norton 360 (for Windows) and Avast Security (for Mac) for their ability to detect, quarantine, and kill suspicious files.
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Phishing is a form of identity theft that can cost you a lot of money. In a phishing attack, a criminal attempts to gain access to someone’s personal details or sensitive information by pretending to be a party this person trusts, such as their bank. The victim is contacted by this impostor and asked to give sensitive information.
Cybercriminals might send you an email that looks as if it’s been sent by your bank, asking you for your login information. They could also call you or send a text message. Most often, they’ll include a plausible-sounding reason as to why they need certain information. Even so, do not fall for this trick!
Your bank will never ask you for your login details, pin codes, or other confidential information. If you receive a text, call, or email requesting your bank details, always alert your bank. Use only the contact details provided on your bank’s official website.
You can inspect an email from your bank to determine if it’s a phishing attempt. Here are some red flags to look out for:
- Incorrect or misspelled email address: Fake email addresses will often contain misspellings, weird symbols, or suspicious domains. For instance, a phishing email might be sent from “email@example.com”. Paypal’s official website and email domain is “paypal.com” and not anything else.
- Misspellings and grammatical errors in the email body: If the email you received is filled with incorrectly spelled words and other grammatical errors, then that’s almost certainly a phishing email.
- Suspicious links: Links that direct to anywhere but the official bank website have a high chance of being a phishing link.
Compromised mobile apps
Most banks will offer a mobile banking app for their customers. But are bank apps safe?
While many of these finance apps are safe and convenient, they also pose risks because they can be compromised. For instance, you might get a Trojan on your phone when you download an app from an unauthorized source.
There’s also a risk of fake bank apps built to resemble your real banking apps. You might think you’re downloading your bank’s official app — but it might be a fake app that will steal your information and, as a result, your money.
Always find your bank’s apps using the bank’s official website. These websites usually link to the app’s download page on Google Play Store (Android) or Apple App Store (iOS). Never download a banking app from an unknown website or source.
Credit card scams
Credit card scams are one of the most notorious dangers of online banking. These scams can take many different forms, such as:
|Type of Credit Card Scam||Description|
|Identity fraud||Tricksters may pose as representatives from a bank or credit union and attempt to get access to your card information. They will then use it to make transactions or access money from your account. Criminals are coming up with more and more sophisticated ways of getting this information from you through all kinds of fake calls, text messages, emails, etc.|
|Skimming scams||These occur when fraudsters get your card information by skimming it when you conduct transactions at ATMs, retail point-of-sale devices, gas stations, etc.|
|Interest rate reduction scams||You receive a call from fraudulent companies that claim they can help lower your credit card interest rates.|
|Social Security benefits scams||You may get a call asking for your online banking information or credit card details because you were overpaid or underpaid for some social benefits.|
|Government impostor scams||Fraudsters pretend to be representatives of the government and ask you for sensitive financial information, such as credit card details. They may even use the real names of government officials and agencies to convince you to disclose your details.|
Never provide your credit card information to people asking over the phone, text, or email. If you suspect that someone is trying to scam you, contact local enforcement and alert your bank.
Data breaches happen when hackers get access to the personal information of large numbers of individuals. Banks are a common target of such breaches because cybercriminals can use their data to conduct massive financial fraud.
Banks and government institutions are always working to combat this threat through better digital infrastructure and cybercrime monitoring. But individuals too can do their part by being vigilant about their passwords and using two-factor authentication.
In the next section, we talk about the best way to avoid data breaches and other risks of online banking.
10 Best Practices for Secure Online Banking
Banks around the world are working hard to ensure safe online banking. However, there are a few safety measures you can take. These tips below will help you decrease the risk of becoming a victim of online banking fraud.
Here’s what you can do to protect yourself while online banking.
1. Change your password often
Use strong passwords, and change them regularly. This is true for all your online accounts but especially important for your bank accounts.
Be sure to use combinations that are difficult to guess, such as a mix of uppercase and lowercase letters, numbers, and symbols. The more complex the password, the better. Such passwords are harder to crack and offer better protection against hackers.
2. Use a password manager
To help you remember your passwords better, you can use a trusted password manager. A password manager can help you create strong and unique passwords and will store your passwords securely. Password managers also let you know when your password is vulnerable and if it needs to be changed.
You can check our ranking of the best password managers for all our recommendations. Top of this list is NordPass, which syncs passwords between devices and protects passwords with XChaCha20 encryption and 256-bit keys. NordPass works natively with all operating systems and has browser extensions for Chrome, Firefox, Safari, Opera, Vivaldi, Edge, and Brave.
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There are also free password managers you can try, though you should always be cautious when using free services.
3. Use two-factor authentication
Two-factor authentication (2FA), also known as multi-factor authentication, adds a second layer of security when logging into your online or mobile banking account. 2FA involves passing a second level of verification after entering your login credentials. This verification can be in the form of a code sent to you via email or text message.
2FA makes it more difficult for a hacker to unlock your account with just your user ID and password, thus reducing the risk of your account being compromised. Most banks now enforce two-factor authentication, but in case yours does not, ask them about it and activate it for your account.
4. Sign up for alerts
Most banks offer text and email alerts that can inform you of account actions, such as debit and credit transactions, failed transactions, change in balances, failed login attempts, and password changes.
We highly recommend signing up for these alerts if you haven’t already because they ensure you can keep real-time tabs on your bank account.
If you get an alert for any activity that you did not initiate or that seems suspicious, contact your bank immediately.
5. Avoid public Wi-Fi
We depend on Wi-Fi for a lot of things, and it’s common to connect to public Wi-Fi networks at cafes, airports, hotels, or malls. However, public networks are insecure and can pose risks such as:
- Wi-Fi snooping or sniffing, where hackers use special software kits or devices to “eavesdrop” on all your online activity, such as the webpages you view and the information you fill in online (like your login credentials).
- Man-in-the-middle attacks, where hackers exploit vulnerabilities in the network to “eavesdrop” on your online activity.
- Transmission of your data over unencrypted networks, which makes it vulnerable to hackers.
- Malicious hotspots that look like trustworthy networks but are actually just rogue hotspots set up by cybercriminals. These criminals can then view your personal information when you connect.
- Malware and spyware that cybercriminals can install onto your device through unsafe networks without you even realizing.
We strongly recommend against mobile banking when you’re on a public Wi-Fi network. If you must access online banking or mobile banking with public Wi-Fi, check out our guide to staying safe on public Wi-Fi.
6. Use a VPN
A virtual private network is another security tool that can help protect you when banking online, especially when you’re using a public Wi-Fi network.
A VPN adds a layer of encryption between your device and the internet, providing a secure internet connection. This results in your online activities becoming anonymous and impossible to attribute to your identity. Cybercriminals will have a more difficult time trying to track your movements and stealing your banking information.
We’ve tested dozens of VPNs for speed, security, and user experience. For secure online banking, we recommend NordVPN as it performs consistently in securing and protecting your online traffic. NordVPN is available across devices so you can enjoy secure mobile banking wherever you may be.
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- Fast and large worldwide network of VPN servers
- Perfect for privacy and streaming
- Trusted by many, with over 14 million users
You can find VPN alternatives in our ranking of the best VPNs for online banking.
7. Keep your device and antivirus updated
Operating systems constantly receive updates from manufacturers. Developers release security patches to combat new forms of malware and new techniques for scamming.
We recommend that you keep your device and apps updated to the latest software versions. Regularly check for system updates, or activate automatic updates for your device.
8. Access only trusted websites and apps
Websites and apps can be fake or infected with malware, created for the purpose of stealing your personal information. Make sure that you access only well-known websites that you know are safe. Keep these tips in mind:
- Always make sure your bank’s web address has a secure HTTPS connection before you log in to your online banking environment. You can check this in the URL of the webpage. It should always say “https” instead of just “http”.
- Double-check an app’s reviews before downloading it. Also, check who the developer is, and do a quick Google search to see if the developer is a legitimate company.
- Never click on any links or files without knowing exactly what they are.
9. Keep your financial details private
Never share your banking information (such as account pin or password, credit card details, passwords, etc.) with anyone. Generally, to receive money, the sender only needs your account name and account number. All other details should be kept private. Additionally, remember that no bank or government authority will ever ask for sensitive banking information.
Moreover, be wary when entering your PIN at ATMs or points of sale to ensure nobody is looking over your shoulder. Don’t say the number out loud while you type it or keep it stored in your wallet. And lastly, never post pictures of your debit or credit cards on social media because you never know who might see or share this information.
10. Use common sense
On the whole, a few basic measures can go a long way to ensure safe internet banking. Here are some general tips that you should always follow:
- Only transfer money to parties you trust. A money transfer usually can’t be undone without the explicit permission of the receiving party.
- Don’t reuse the login details of your online bank account for other websites.
- Delete suspicious emails or messages without clicking on any links or downloading any files they contain.
- Immediately contact your bank if you receive what you suspect to be a phishing email or a scam email.
- If something doesn’t feel quite right as you’re transferring a payment, don’t complete the transaction.
- Frequently check your online bank account so you’ll quickly spot any peculiarities before they start to cause trouble.
Conclusion: Bank Online Safely With These Security Measures
Gone are the days of going to a brick-and-mortar bank. With online banking, you can conveniently monitor your savings accounts without the need to visit a traditional bank.
However, online banking poses risks, much like other internet activities. If you or your bank aren’t careful, you might fall victim to malware infection, phishing or credit card scams, data breaches, or more.
To keep your online bank account safe, make sure you take steps to protect your account information and your device. Use a password manager to ensure that you have strong passwords, and never share your password and other sensitive information with anyone.
Always inspect texts and emails from your bank to ensure you avoid phishing. Remember to alert your bank if you received a suspicious message or if someone claiming to be from the bank is asking for your account information.
To protect your device, we recommend you activate two-factor authentication and keep an antivirus running on your device to root out any infected files. Never access your bank’s website with a public Wi-Fi network. And to encrypt your data and activity, make sure you use a VPN.
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For more information on online safety and privacy, visit our other resources below:
- 10 Tips for a Safer Online Shopping Experience
- The Five Best Cybersecurity Tools to Protect Yourself
- How to Be Safe Online: 8 Cyber Hygiene Tips to Keep You Safe
Is Online Banking Safe?: Frequently Asked Questions
Have questions about secure online banking? Check out these frequently asked questions, or leave a comment below!
Is online banking safe?
Online banking can be safe if you take the proper precautions against cybercrime. Otherwise, you can fall victim to fraud, malware infection, phishing, credit card scams, or more. Here are just a few tips to get you started:
- Use a password manager to create strong passwords, change your password regularly, and store your login credentials.
- Never access your online bank account when using public Wi-Fi. Public Wi-Fi is easily hacked by cybercriminals looking for people who don’t encrypt their online activity with a VPN.
- Use an antivirus program to ensure that none of your files are infected with malware. Malware can be utilized to steal your login credentials or take your device hostage.
What are the risks of online banking?
The biggest risk of online banking is losing your money. Cybercriminals use different tools and techniques to do just that, including infecting your device with malware and posing as your bank to trick you into giving them your bank account details. There are different types of both malware and scams that you should be aware of. Read our guide on online bank safety for more information.
What is the safest way to bank online?
The safest way to bank online is to use security tools like an antivirus scanner and a VPN to ensure that no one is spying on your device and online activity. You should also enable two-factor authentication and text alerts from your bank. Most importantly, exercise critical thinking and caution when you encounter texts, emails, and phone calls from your bank. Always keep a lookout for phishing attempts. Read our full guide on secure online banking.
Nathan is an internationally trained journalist with a special interest in the prevention of cybercrime. For VPNOverview he conducts research in cybersecurity, internet censorship, and online privacy. He contributed to developing our rigorous VPN testing and reviewing procedures.
Mehak has been writing for over a decade and is passionate about helping people have safer, healthier relationships with all things tech. She has a master’s degree in communication and is interested in the impact of technology and the internet on global communities.
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Standard safeguards include anti-virus protection on bank website encryption, fraud monitoring, firewalls, bank computers, which scrambles data so that only the intended receiver can read these data. When secure bank technology on the back end is paired with educated clients on the front end, online banking is safe.What is the safest way to do online banking? ›
- Never use unsecured public WiFi. ...
- Don't save logins. ...
- Use passphrases instead of passwords. ...
- Keep up on updates. ...
- Never click on email links. ...
- Check your account often from a safe location. ...
- Use a unique username.
- Password protect your phone, tablet, computer. ...
- Create strong, unique passwords and change them every 3 months. ...
- Use multi factor authentication. ...
- Don't keep your accounts logged in. ...
- Avoid banking on public WIFI. ...
- Don't access your bank account from a shared computer.
Standard safeguards include anti-virus protection on bank website encryption, fraud monitoring, firewalls, bank computers, which scrambles data so that only the intended receiver can read these data. When secure bank technology on the back end is paired with educated clients on the front end, online banking is safe.What are 5 risks of online banking? ›
- Operational Risk.
- Security Risk.
- Risks due to system architecture and design.
- Reputational Risk.
- Legal Risk.
- Money Laundering Risk.
- Cross-border Risks.
- Strategic Risks.
- Phishing. ...
- Social Engineering. ...
- Malware And Ransomware. ...
- Cloud-based Cybersecurity Threat. ...
- Customer Behaviors. ...
- Spoofing. ...
- Fraud And Identity Theft. ...
- Banking Security With GuardRails.
So, is Mobile Banking Safer than Online Banking? Whether you choose mobile banking or online banking, you can be confident that your bank has invested in the security of these services. However, mobile banking is a little safer when it comes to security, mainly because this type of banking does not store any data.How do I make sure my bank account is safe? ›
- Check Your Accounts Regularly. Keeping an eye on your account will help you know when something is wrong. ...
- Never Give Out Your PIN to Anyone. ...
- Use Stronger Passwords. ...
- Be Careful Where You Access Your Account. ...
- Avoid ATMs in Touristy Areas or That Look Out of Place.
- Get the latest anti-virus and firewall software. ...
- Update your internet browser. ...
- Create a strong and easy-to-remember password. ...
- Use a different password to the one you use for other services. ...
- Change your password on a regular basis. ...
- Never share your password. ...
- Don't let your browser remember your log on details.
Hacking your data: Hackers can steal your money remotely
Hackers have created malicious software (known as malware or Trojans) that attack bank apps. If you're tricked into downloading malware onto your phone, a scammer can spy on you and steal your mobile banking username and password.
- No Actual Branches. ...
- Tech-Related Service Disruptions. ...
- Concerns about Identity Theft and Security. ...
- Deposit Restrictions. ...
- Faster is Not Always More Convenient. ...
- No Relationship with a Personal Banker. ...
- Limited Services Scope. ...
- Possibility of Overspending.
The CDs offered by online banks are just as safe as those offered by their giant corporate peers, as long as their deposits are federally insured. It is very rare for a financial institution, online or off, to not be FDIC insured.What are 3 pros and 3 cons of online banking? ›
- Better Rates, Lower Fees.
- Better Online Experiences.
- No Personal Relationships.
- Less Flexibility With Transactions.
- The Absence of Their Own ATMs.
- More Limited Services.
Some online banks allow customers to make deposits at ATMs. But even if your online bank has an arrangement with an ATM network, you might not want to use it. If you feed bills into an ATM and it gets jammed, it's not an easy problem to resolve.What are the top 3 bank risks? ›
Major risks for banks include credit, operational, market, and liquidity risk. Since banks are exposed to a variety of risks, they have well-constructed risk management infrastructures and are required to follow government regulations.Is online banking safer with an app or browser? ›
Kyle Marchini, a fraud management expert, told Burnette that it's easier to download malware using a browser than it is with apps. However, it's possible to unknowingly download a false version of your financial institution's banking app through a platform like Google Play or the App Store.Is it safe to do online banking at home? ›
- Use a strong password that avoids common words, numbers or keyboard patterns (such as 'password' or '123456'). ...
- Don't reuse passwords for different accounts.
- Never share your full password or PIN number.
- Make a Password Longer Than Six Characters. ...
- Use Uppercase and Lowercase Letters, Numbers, and Symbols. ...
- Don't Use Children's Names or Common Words. ...
- Use Separate Passwords for Each Account.
Online banks are FDIC-insured just as traditional banks are, meaning each customer is protected by up to $250,000 per bank, per account ownership type. But that's not the only way online banks can keep your money safe.