Online Banking
Pros & Cons

More people are using online banking than ever before. According to recent statistics, 12 billion bills were paid online in 2009, making online banking the preferred method over paying bills by mail. Just how safe are these billions of transactions? Keep reading for expert opinions on the safety of online banking.

Woman on computer banking

1It's all about the right equipment

With the right equipment and precautions, banking veteran Greg Meyer says online banking and bill paying should be simple and safe. As community relations manager for Meriwest Credit Union, Meyer advises customers to protect their PCs with a strong firewall and antivirus program. His suggestion? Mimic what many Fortune 500 companies do by purchasing McAfee or Symantec products. If it's good enough for them, it should be good enough for your home PC. "Often, these products can be free from your local cable broadband provider, or you can get them inexpensively from a local electronics store."

In addition, Meyer points out that regulations have made online banking a safer option for consumers. "Regulation E, the laws that regulate electronic banking, provides significant protection to account holders against unauthorized electronic use of their accounts," he says.

2Handle mobile banking with caution

That being said, Meyer still advocates caution, especially when it comes to the relatively new territory of mobile banking. Before downloading any online banking apps, be sure to do your homework. According to Meyer, Apple and BlackBerry carefully vet their mobile apps, while Android and Palm are "open source" software, meaning any developer can create and share them.

Lisa Robinson, senior vice president of risk management with Wells Fargo's Internet Services Group, agrees that you should handle mobile banking carefully. "Unless you initiate the contact, never disclose personal information through text message, e-mail, or over the phone," she says.

3Monitor accounts regularly

Aside from a reliable firewall and antivirus program, you can actually be the next line of defense when it comes to identity theft protection. Robinson recommends consumers frequently monitor their accounts so they spot any questionable or fraudulent activity quickly. Should you notice anything suspicious, report the incident to the authorities and to your financial institution.

4Do your homework

Stay one step ahead of phishing schemes and scammers by researching your financial institution online beforehand. Verify the banks' contact information, then check the Better Business Bureau to make sure there aren't any legitimate complaints filed against the company's website link and address.

5Use secure websites

To determine if you're in a safe zone or web page start with the URL. Simply look for "https" in the URL. Also, look for an image of a padlock in the lower right-hand corner of your browser to verify you're in the clear.

6Guard your password

Online banking can be safe when you take extra precautions. Robert Richardson, online marketing manager for the Nevada State Bank, suggests creating user names and passwords that are random and difficult to guess. "Change passwords often and never share or write down user names or passwords," he advises. "When using public computers, make sure you have privacy before entering log-in information. Also, don't allow a shared computer to 'remember' your log-in information."

More ways to safe online

Tags: identity fraud online banking

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Comments on "Is online banking safe?"

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Amy August 18, 2012 | 4:26 PM

Great advice!! I've always considered online banking a "pro" as it's super convenient, but yes it's important to really protect your password and manage your accounts. My parents bank online but still balance their check book every month to make sure it all adds up. Better to be safe than sorry!

Anna November 01, 2010 | 10:42 AM

Great tips, thanks!

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