lets you avoid visiting a physical branch and take care of many routine banking needs from the comfort of your home. However, if you bank online, it’s important to be sure your financial institution has safeguards in place to protect your personal information and finances from cybercriminals.
According to a by PYMNTS and Entersekt, 83% of consumers are confident in their banks’ security measures, but half of all consumers feel they should provide additional protection. The same study also showed that 38% of consumers are concerned about security measures when using new devices to access their bank accounts.
When , doing some research to learn more about how your financial institution protects you online is key.
Why banking security matters
Think about all of the information your bank has about you and your finances. When you open a bank account, you’re trusting that financial institution with your money, as well as sensitive information such as your address, employment and income information, date of birth, Social Security number, and more.
In the wrong hands, this kind of information can lead to identity theft, fraud, and other types of cybercrime. And that’s a very real risk. A by the Identity Theft Research Center found that more than 300 million Americans had their data compromised in 2023. Over 700 financial services companies reported compromises, double that of the previous year.
The good news is that there are several security measures banks and consumers alike can implement to keep banking data secure.
6 bank security features to look for
When considering a new bank, or evaluating your current bank, verify whether the following safety measures are in place:
1. Encryption
Encryption is a technique that banks use to encode information so that only those authorized to see it can do so. Most banks and credit unions include information about the type of encryption they use on their websites. Strong encryption is just one tool that can keep cybercriminals from getting their hands on your sensitive information.
2. Two-factor authentication (2FA)
Two-factor authentication is an added layer of security on top of entering your username and password to gain access to your bank account. For example, you may be prompted to enter a one-time code texted to you by the bank or answer security questions.
It might seem like a tedious extra step each time you log into your account. But if the wrong person gains access to your password, 2FA serves as an added safety net.
3. Biometric authentication
Facial or fingerprint recognition is sometimes required to log into bank accounts. This ensures that no one but you has access to your account and gives you an added layer of security on top of your private password.
4. Fraud monitoring and security alerts
Banks conduct fraud monitoring as a crucial part of their security and risk management practices. That includes reviewing transactions for suspicious activity — such as out-of-state or unusually large purchases — and flagging potential issues to customers before approving them.
In many cases, you also have the ability to set account alerts for suspicious or fraudulent activity. For instance, you might want to receive a text or email any time there’s a transaction over a certain dollar amount. This can help you catch unauthorized purchases right away and resolve the problem quickly.
5. Strong password policies
It might feel like your bank is making you jump through extra hoops when it presents you with a long list of password requirements, but a strong password is crucial for protecting your banking information. A random, complex, and unique password makes it just about impossible for another person to guess what it is and gain unauthorized access to your account.
6. Automatic logout
Some banks employ a session timeout feature that can help protect your online banking account if you forget to logout.
Here’s how it works: Once you log into your online banking account, the bank’s server starts a timer. This timer tracks how long your banking session remains idle, meaning there’s no interaction between your device and the bank’s server, such as clicking, typing, or navigating through the site. You may receive a warning message or prompt as you approach the end of the timeout period. If no action is taken, you’ll be automatically logged out of your account, preventing anyone else using the same computer or phone from accessing it.
How to keep your online banking information secure
Finding a bank that works diligently to protect you and your financial information is crucial, but those security measures can only go so far. There are also important steps you can take to work with your bank to keep your information secure.
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Avoid public computers and networks: Public computers or networks used by multiple people can pose a threat because the device or network may save your keystrokes, making it easier for others to steal your login credentials. Only log into your online banking account while on a private network, or at the very least, be sure to log out of any personal accounts you access on a public computer.
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Use unique passwords and change your passwords periodically: Using the same passwords for all of your private accounts can be a dangerous game if any of your accounts become compromised. Make it a priority to update your existing passwords periodically and come up with unique combinations for each of your accounts (including numbers, uppercase and lowercase letters, and symbols). Don’t worry: You don’t have to memorize all of these passwords; a password manager such as LastPass or 1Password can securely store them for you and even suggest unique passwords for you to use.
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Take advantage of 2FA: Two-factor authentication adds an extra step to your login process, but it can make all the difference in protecting your account. Take the time to link your phone number, email address, or recognition software to your account so that you have a second line of defense against hackers.
Sign up for banking alerts: If you’re not combing through your bank statement each month, you could miss out on unauthorized transactions. Luckily, many banks have measures in place to flag these for you in real time. Still, it’s a good practice to log into your bank account and review your account and notification settings so that you can make sure you’re made aware of suspicious activity.