How is online banking safe and secure?

When you establish a connection with your bank via its web portal for example, a secure connection is set up. To establish this connection, you are required to log in. The device which you use to log in generates tokens based on your bank card and pin code for example. Only a person who has your bank card and who knows your pin code can log into your account. All the data which goes over the internet will go through a secured channel. This connection cannot be broken into, therefore every transaction which you make is secure. In your last sentence you mention spam, but spam has nothing to do with online banking. Spam is unsolicited e-mail. Your bank does nothing via e-mail.

There is one big flaw in this system and that is the user. If a user would lose his bank card and he or she would share his pin code, the security of the account in question is broken. If a user has not updated the software on his or her computer and he or she has not installed an anti-virus solution, the computer of the user is at risk. Evildoers can abuse the computer and interfere with the secure session which a user has set up with his or her bank. This way an evildoer can alter transactions or add entire new transactions during this secure session, leaving the victim with an empty bank account. Always make sure that the software on your computer is up to date. Install a proper anti-virus solution such as ESET NOD32 and perform regular scans. Internet banking is safe, make sure that your computer is too.

Aside from the transport of data over SSL (now "TLS", which is not an absolute state of affairs by the way), financial institutions using Windows OS's of any flavor, are at the mercy of the same vulnerabilities that home users are.

For instance: Adobe Reader, has persistent security issues, whereby a 'spear phishing' attack (deliberately sending a tainted PDF file to a targeted bank person) is instituted, and if the target opens the PDF, malware is installed, with the potential of spreading within their entire LAN.

It all gets down to a matter of TRUST.

We trust that a bank will have iron clad policies, system wide best available configurations, and so on, to insure problems are minimized...but how do you know? You can't. It's just a matter of trust that they do.

Most banks in the United States offer an online banking interface for account holders. Online banking allows many tasks that were restricted to daytime banking hours. Customers can work on transferring funds, opening additional accounts and making loan payments. In an effort to add more value to their online services, many banks also offer bill payment and free account-to-account transfers. These services have increased the convenience of banking, and they have changed the world of finance.

Online banking is safe as long as consumers are smart and vigilant. Banks often have a vigorous system in place to guard access. Some methods include virtual keypads, numerous password stages and photo identifiers. In addition, banks guarantee losses due to theft. Banks return the money within 24 hours of a report in some cases. These steps, combined with state-of-the-art technology and encryption, keep most consumers safe.

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