In a few short years, the Internet has changed our spending habits almost beyond recognition and banks around the world have been quick to join the revolution. And we clients have certainly enjoyed swapping long queues at local bank branches to getting our banking done with a few clicks while sitting on the couch and watching our favorite TV shows. But, there are other threats out there…and are the banks doing enough to protect against cyber crime?
Are Banks Doing Enough to Protect Against Cyber Crime?
As online banking has become part of our everyday lives, some argue that the ease of use has lured us into a false sense of security. Just because your bank tells you it is safe to use their online banking systems, it does not necessarily mean that this is actually the case.
Beware of the Risks
In fact, hackers target banks 300 times more than any other industry, costing banks an astounding $1 trillion each year. Already in 2018, approximately three-quarters of Americans had signed up to mobile banking. So, the losses from cyber crime can only be expected to keep rising as more of us do our bank online.
But why should you care if the banks are being targeted?
After all, surely they have a duty of care to their clients and therefore are responsible for any money lost?
Sadly this is often not the case. For example in the UK, in almost half of all credit card fraud cases in 2018, the victims never got their money back, with the average loss being £800 (approximately $1,000). Such frauds are committed in multiple different ways, but rapidly increasing online shopping is clearly part of the problem.
With countless online transactions taking place every second around the world, it is therefore crucial that our banks use the best possible security to keep our money safe.
Besides the many external threats to our banking safety, the internal risks are a considerable factor as well, perhaps even more so. This does not necessarily mean Hollywood style inside-man heists. Although less dramatic insider crimes certainly are a possibility.
Much more likely culprits are:
- simple human errors,
- the potential carelessness of employees,
- outdated systems still in use, and
- insufficient staff training.
What You Can Do To Protect Yourself
Being faced with such stark realities, can we personally do anything to protect ourselves and our financial information against cyber crime? First thing is to try to keep your data as safe and well protected as possible, so always make sure it really is your bank asking for your details.
- Make sure you know the questions your bank would never ask you online or over the phone.
- Hang up or log out if you are unsure about the origin of the contact attempt.
- You can always call the bank back.
Also, make sure the bank you entrust with your money uses the safest and latest technologies for their verification and log-in authentications. For example, only a worryingly small number of banks use a two-factor authentication login, even though it is known to make hacking considerably more difficult.
Your bank should also…
- require you to use strong passwords,
- alert you quickly of any new scams, and
- ensure you know how to use their online banking system as safely as possible.
Ultimately though, it is important to choose a bank that follows the latest online banking safety guidelines as the pace at which cyber-criminals come up with new ways of breaching security is only increasing.
Protect Against Cyber Crime – In Conclusion
Both the banks and clients are quickly becoming used to fast-access programs and systems that rely on Internet of Things (IoT) technologies. While convenient, IoT opens many weak spots for criminals to exploit. Something that can be skirted by full data encryption across all networks and all data transmissions through VPN technology.
So while the banks are trying to find the balance between best possible security features and a streamlined quick access online banking, the best we can do is to choose our banks wisely and stay updated on how they manage the safety of our hard-earned assets.
What do you think? Are banks doing enough to protect against cyber crime?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.