Online banking has revolutionized how we manage our finances, allowing us to pay bills, transfer money, check account balances, etc—all with the click of a button. However, the convenience of digital banking has also opened the door to new fraud risks that customers should stay vigilant against.
Based on data from a 2021 report from Juniper Research, the global cost of online payment fraud is expected to reach $206 billion by 2025. Bad actors will use every fraud technique in their arsenal to hack into accounts and steal hard-earned funds. Therefore, customers must understand online banking threats and utilize best practices to protect themselves.
In this article, we will explore common threats plaguing the digital banking industry and provide practical, actionable tips for guarding against these threats and staying safe.
Common Types of Online Banking Threats and How to Guard Against Them
There are several tactics bad actors use to commit online banking scams. Here are some of the most common threats.
The act of phishing involves cybercriminals posing as legitimate entities, like a bank, via email or text messages in a bid to trick you into revealing sensitive information. This could include details like your bank account number, login credentials, or BVN. These attacks feed on your trust in the supposed sender, drawing you into divulging pertinent information.
How to prevent it: To protect against phishing attacks, be careful when clicking on unknown or suspicious links or attachments. Watch out for common tactics fraudsters use, like urgent or threatening language, misspelled words, or suspicious links. Antivirus software can also help prevent phishing attacks. Phishing scams evolve over time and become more sophisticated, so educating yourself on how to recognize and avoid them is important.
With identity theft, scammers steal people's personal information and perform actions on behalf of the victims. They might apply for loans under your name, leading to financial damage and a tarnished reputation.
How to prevent it: To guard against identity theft, it is important to use strong, unique passwords for your online banking accounts. Enable multi-factor authentication (MFA) whenever possible to add an extra layer of security. Regularly monitor your bank statements and credit reports for any suspicious activity.
Malware, or malicious software, is a class of threats that can interfere with your computer's operation, gain unauthorized access to private networks, or gather sensitive information like banking data. They come in different forms, including viruses and ransomware, which can obstruct the functionality of your system or corrupt your data.
How to prevent it: To protect against malware, ensure that you have reliable antivirus software installed on your devices and keep it up to date. Avoid downloading files or clicking on links from unknown sources, as they may contain malware. Also, scan your devices regularly for any potential threats and remove any suspicious files immediately.
Another prevalent online banking risk is the Man-In-The-Middle (MITM) attack. In this scenario, hackers position themselves between you and your bank's website to intercept and modify the communications. By doing so, they can access login credentials and transaction details.
How to prevent it: To prevent such attacks, always connect to your online banking account using a secure and trusted network. Avoid using public Wi-Fi networks, as they are often unsecured and can be easily exploited. Additionally, look for the padlock symbol and "https://" in the URL to ensure a secure connection.
Account takeover refers to unauthorized access to a person's online banking account by cybercriminals. These criminals gain access to the account by stealing the user's login credentials, like username and password, through methods like phishing emails or malware attacks. Once they have access, they can carry out fraudulent activities, like transferring funds to their own accounts or making unauthorized purchases.
How to prevent it: To protect against account takeover, create strong, unique passwords for your online banking accounts and enable MFA whenever possible. Regularly monitor your account for any suspicious activities, like unauthorized transactions or changes in personal information, and report them immediately to your bank.
Fintech Mobile Banking Risks
With the increasing popularity of mobile banking apps and the adoption of fintech platforms, cybercriminals have shifted their focus to exploit vulnerabilities in these platforms.
How to prevent it: To safeguard your mobile banking experience, ensure that you download the official app from a trusted source, like an official app store. Keep your mobile operating system and banking app up to date to benefit from the latest security patches. Avoid storing sensitive information, like account numbers or passwords, on your device and enable biometric authentication, like fingerprint or face recognition, for added security.
Conclusion: Embracing Safe Online Banking Habits
Online banking platforms provide great convenience and instant access to manage our finances, but they also come with risks if proper precautions aren't taken. By being aware of common online banking fraud tactics, using strong and unique passwords, setting up MFA, avoiding suspicious links and attachments, and exercising caution when connecting to public Wi-Fi networks, you can reduce your chances of becoming a victim.
Don't let fears of fraud stop you from reaping the benefits of online banking. Just ensure you implement the online security and prevention practices provided in this article to keep your financial information and money safe.