Are you considering online banking?

Filed in archive Banking on January 31, 2006

One of the questions that many ask concerning online banking is if it is safe. Before we talk a little about that I want to remind you in reference to one think about the media in general: any story that they tell is one that is full of hype and extremes for the purpose of selling stories. So in the case of internet banking, you will always hear the most outrageous scenarios that have happened.

Now keeping that in mind, internet banking is actually been found to be far safer than regular banking; fraud connected with internet banking is far less than all other banking fraud. Bank of America e-commerce executive Sanjay Gupta says less than 1 percent of fraud at the bank occurs via online transaction.

Think of it for a minute, whenever you use your credit card and sign it at a regular store, your number is there for any worker to see. Even at the gas station you may push it in and think that nobody else will see it. Yet, inside, the computer has your card number on file so that any worker could see it.

I am not saying this to cause fear but to show you that there should be less concern for fraud in online banking than for regular banking.

Here are a few things to keep in mind as you look for an online-banking provider.

Confirm: Whether you are selecting a traditional bank or an online bank that has no physical offices, it's wise to make sure that it is legitimate and that your deposits are federally insured. Check the bank's Web site under "About Us" or a similar section that describes key information, such as bank history, the official name and address of the bank's headquarters and information about its insurance coverage from the FDIC.

Passcodes: You want your online bank to require passwords and personal identification numbers (PINs) that you select. You should be required to give your PIN every time you make a transaction within your account. Make sure you can change your PIN as often as you like.

Monitor regularly: One of the best features of online banking and electronic bill-paying is that you can watch your accounts hourly, if you desire. You can watch to see when deposits are credited and when payments are processed. If you see anything irregular, report it immediately.

Open networks: Never conduct online transactions from a public or open network such as a hot spot in a coffee shop or Internet cafe. That's an invitation to trouble, because you have no idea what security level the network is operating on or who might be able to "listen" in.

One key to also keep in mind is that whenever you get a link from an e-mail, don't use that as the source for entering your banking Web site. Instead, use the link that you have bookmarked. Along with that, look for icons that show that there is secure-encryption and make sure that the customer service links actually work. Usually the fake sites don't have these available.

I have had nothing but success with my online banking experience. It is efficient, convenient, and very safe. Just keep these things in mind as you decide when you want to begin this service.