Is Online Banking Safe?
By Gail Rickards
Online or I-banking security parallels most of traditional
banking's safety features. Even though technology changes
rapidly, the ideas stay the same. Consider what we're used
to seeing at our local bank branch office:
Offices Designed to Protect Cash
When you walk into your bank, it looks and feels secure. There's
a heavy vault door, and the tellers sit behind a protective
counter. The back area remains locked and well supervised.
Your bank may even have a guard in the lobby.
Identification and Procedures
If the teller doesn't know you, you will be asked for ID--and
a supervisor may have to approve your transaction. There are
policies and regulations about everything, even confidentiality.
For instance, ask a teller for your balance, and the answer
is written, not spoken.
Your Responsibility
For your part, you pay attention to the whereabouts of your
checkbook and ATM card, and you keep your PIN a secret. Every
month you check your statement to be sure the bank's accounting
matches your own.
All this gives you a sense of security and peace of mind.
To foster a similar peace of mind, I-banking adapts these
features to its new technology:
How An I-Banking "Office" Is Designed
There isn't a vault door, but the computer system that runs
an Internet banking software program is designed with a similar
purpose: Instead of securing the cash, the goal is to keep
the information safe.
Called "system architecture," the computer system design
controls where information is located, how it is gathered,
and how it is sent to you over the Internet. Information is
stored in data files, and files are separated for safety--checking
account information, for example, is never mixed with any
other data.
System architecture also controls which computers, modems,
and other communication devices are connected to the outside
world. The fewer there are, the less chance of a hacker or
other threat finding its way into the bank's system.
A Different Kind of Lobby Guard
Bank staff and guards constantly watch who is coming into
and leaving the lobby. So does a "firewall." A firewall
is a computer in the bank's system configured to watch traffic
coming in and going out--and to permit certain requests to
log onto I-banking and block others. It also sounds an alarm
when an unauthorized person tries to get into the site.
I-Banking ID and Other Protections
There isn't a teller to ask for your driver's license, so
you have to identify yourself. User IDs and passwords control
who can legitimately gain access to the site. Each person
who applies for access gets a separate ID and password, even
if he or she has a joint account.
Once you have your ID and password, you must enter them correctly
when you log on. Usually, if you make three errors you're
temporarily locked out. By denying access to the site, the
I-banking program protects against someone with part of your
codes guessing the rest.
Procedures control which users have access to what information.
I-banking creates separate portfolios for each user based
on which accounts each person actually signs on. For instance,
if your husband has a savings account in his name only, you
will not see that account in your portfolio.
Scrambled Messages Are Confidential
There's no teller to protect you by writing down your balance,
but encryption will protect all of your communication. Encryption
randomly scrambles the characters of everything that you and
the site send and unscrambles them on receipt. The current
standard is 128-bit encryption, with a mathematical complexity
too daunting for hackers to break.
Your I-Banking Responsibility
Just as you protect your checkbook, you need to protect your
user ID and password. When you change your password, follow
the site's recommendations about length and mix of letters,
numbers, and symbols. Don't ever share your password. Read
the site's safety tips and other information provided under
the "Help" button. Find out how to exit properly and learn
more about removing the traces of your I-banking session stored
on your hard drive.
Still Not Convinced?
Don't let the word "Internet" cloud your thinking about safety.
I-banking is still banking, and your accounts are still insured
by the FDIC up to $100,000 or more. It's just banking delivered
in a new way--the way of the future.
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