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Online banking trends are on the rise these days. Prolonged lockdown during 2020 has set the bar for digital banking very high. Users prefer to work through online platforms rather than using manual ways. Online consumers like to perform their digital-related tasks through their mobile phones. For instance, in Q3 of 2020, the number of consumers using digital services provided by the banks was 6%. On the other hand, the number of consumers using digital banking through mobile apps increased by 10% Yoy.
A report in 2020 claimed that the number of digitally active users using online banking was 55 million and those actively using the mobile apps was 40 million. Considering the huge prevalence of digital banking solutions, it is important to ask is it safe? The answer is yes. Online banking transactions like any other digital process can be safe and secure, only the consumer requires to be cautious and well informed while performing them.
Introduction to Online Banking
Digital banking is an electronic system that enables the customers of a bank or financial institution to operate a range of financial transactions through the website. The most significant use of web banking is its swiftness. The manual bank processes that took hours or even days, but now can be completed digitally in a matter of seconds. What else your customer would want when they are given the solutions rapidly and that too with high authenticity. Along with most of the benefits, e-banking also has some challenges to encounter.
Frauds associated with Online Banking
Online banking systems come under the target of phishing and identity theft. The accounts are taken over and the motive is to remove money from a bank account or to transfer money to an account of another bank. Fraudsters are playing this game because the consumers are acting carelessly while dealing with digital banking. Digitally active consumers can definitely fall prey to online fraud if they ignore their account security measures, use a simple password, and carelessly access their account with any available computer system or wifi.
Following are some of the frauds prevailing in the industry:
Phishing
It is the most common type of online fraud in which the customers are accessed through a phishing e-mail or SMS. The fraudster sends a malicious email link through which the customer would be asked to send their confidential details like credit/debit card information and ATM pin number.
Identity theft
It is the type of online fraud in which the information of the other person is obtained to sign up for online accounts like performing unauthorized transactions or purchases.
Trojan virus
It is a maligned computer program designed to gain access to the saved information on a computer during the process of home banking.
6 ways to secure Online Banking Transactions
Having seen the probability of frauds associated with web banking, it is crucial for businesses directly associated with finance to have secure ways to make their transactions fraud-free.
Advent ID Verification Solutions
The most important thing for any business is to ensure that they onboard legitimate customers. The keystone of success for any business relies on the authenticity of the individuals they do business with. Customer Due Diligence (CDD) or Know Your Customer (KYC) defined by banks is the mechanism to verify that your customers are who they say they are. The verification done one time can reduce the chances of the frauds included in business to the lowest.
Changing your passwords regularly
In our homes, for safety purposes, we place locks on our doors. Similarly, our digital space needs to be secured and in such cases we use passwords. Passwords are like door locks but to your digital territory. It is advised that the passwords must be renewed every 90 days. Ideal passwords contain 14 characters including upper and lower letters and a mix of special characters.
Using licensed anti-virus software
Computers are prone to viral attacks. Even mac users are needed to install certain anti-virus software in their system to combat viral attacks. Either set your computer to update the software automatically or update it yourself often. But never set your computer to download any new software automatically.
Checking bank statement regularly
An advised way to keep financial frauds in control is by checking one’s bank statement regularly. The good gap in the process can be a time span of 30 days. Banks can also be very efficient in keeping the record for every transaction made on their platform. They are compliant with KYC/AML legal requirements to prevent money laundering, terrorism financing, and other financial crimes.
Avoid using public Wifi while online banking
The common mistake that digital users make is that they perform their financial activities like funds transfer on computers connected to public Wifi. This is a very common mistake but still, consumers make it. While doing anything that requires one to log in, they put themselves at risk and should keep in mind that their information can be accessed by any hacker.
Avoid using email links to open financial sites
The link sent to you through an email by anyone can never be trusted to approach financial sites. Instead of using email links, try to retype the bank URL every time before using it, especially if you are going to do any transactional activity or to provide sensitive information.
Conclusion
Web banking is a secure and swift process to carry out financial activities online. Phishing and identity theft are common frauds incorporated in the online banking industry. Some ways to prevent online fraud are to use Advent ID verification solutions, employing anti-virus software, checking bank statements, and changing passwords regularly.
