Online and Digital Banking - Is It Safe?

Written by Carly Simon-Gersuk

With customers utilizing smartphones, tablets and other devices everyday (prior to COVID but even more so now), technology has been driving substantial changes in the way people interact with the banking industry. But, people have been reluctant to take their banking to the internet for concerns about security and fraud.

In fact, along with the advent of online banking, banks and credit unions have introduced many layers of security to protecting customers. To reduce customers' vulnerability to being hacked or data breaches, financial institutions use extremely secure servers, firewalls and encryptions. Such heavily encrypted portals may include a login and password, as well as a one-time password that could be sent via email or text message to verify the account.

Communication is a useful tool for online safety. A survey conducted by Juniper Research found that online banking customers' use of chatbots are reducing fraud and elevating digital customer experiences, which can save financial institutions $8 billion annually by 2022 (1). Similar to sending a one time password to log onto a device, financial institutions are likely to send an email verification as well once the login has been completed. This type of notification protects you and your information since if it was not you that logged in you can notify the institution instantly.

Another thing to remember about financial institution communication is they will never send you a message asking for your bank account details or personal information (such as birthdate or login information). This is a common tactic of scammers, to send emails or text messages asking for personal information. If you are ever unsure, contact a representative from your financial institution.

Having unlimited access to your financial accounts also creates a safer way to banking. It allows for real-time updates that allow you to check your balance and transactions, and pay bills. The use of digital banking furthermore helps monitor accounts to make it easier to identify and remedy fraud. In an interview for Forbes, Eric Kraus, VP of Fraud Management at FIS stated, “The industry is making it easier for consumers to protect themselves, with services like deactivating a lost debit or credit card from a smartphone, restricting access to credit bureaus and real-time event notifications.” (2)

There is no denying the need for financial institutions to integrate digital technology. The use of digital technologies serves various purposes, including efficiency, increased sales, customer education and cutting costs. It also serves the purpose to allow real-time access to monitoring transactions and other various tools to make it easier to keep you and your accounts safe.


Written by Carly Simon-Gersuk