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Identity Theft and Online Banking

By: Jack Claridge - Updated: 19 Sep 2012 | comments*Discuss
Identity Theft Online Banking Hacking

The internet has opened up many possibilities to us and with the advent of new technologies has improved the way we live and also how we organise our daily lives. No more so is this evident than with online banking. But how secure is it, and are users safe from identity theft?

What is Online Banking And does It Jeopardise Data Security?

Online banking is - as the name suggests - the ability to monitor and make changes to your bank or building society account, set up direct debits, make money transfers, pay bills and check statements.

Offering the same facilities as those offered if you were to travel to your nearest branch, online banking offers its users the chance to deal with their affairs from the comfort of their own armchair without having to worry about rushing to the bank in their lunch break or missing important payment dates because of holidays.

In many ways online banking is much better than the ordinary branch banking but it is important to note that it does have some disadvantages if not used or monitored correctly. Done properly, with other precautions such as a firewall, anti-virus and anti-spyware software, data security should not be an issue.

Is Online Banking Safe Against Hacking?

It is fair to say that online banking is as safe as any method of transaction you might utilise online. However the banks and building societies of the United Kingdom have gone to great pains to minimise the risk to customers who avail of their online services, and have tight security in place to keep out hacking on their end.

When you sign up to online banking - a free service - you will receive a username and password (separately) through the letter mail system. These pieces of information are sent separately to reduce the risk of anyone duplicating the details whilst they are in transit (which could easily lead to identity theft).

You may - as many people seem inclined to do - change your password once you have activated your Online Banking account. This ensures the risk of usernames and passwords being matched is greatly reduced and increases computer security.

Improving Computer Security Whilst Banking Online

By far the most common and effective way of increasing computer security whilst banking online is the installation of anti-Spyware software: this software is used to locate and eradicate instances of Spyware on your computer. Spyware is the umbrella name for a category of programs designed to infiltrate the hard drive of your computer and send information out to an end user somewhere in cyberspace - in other words, a way in which you could easily become a victim of identity theft.

A decent firewall is also a must when it comes to online banking; this is especially useful if you save copies of your bank statements to hard drive or import data from bank accounts into spreadsheets for either business or domestic accounts - data security is important at your end as well as with the banks.

The firewall in conjunction with reliable anti-virus software will minimise the risk of your hard drive becoming virus infected and also greatly reduces the risk of an unknown gaining access to your computer and downloading copies of data which could be considered sensitive and bringing about identity theft.

Such data may include customer records, bank details, employee payroll data and so on - so it is important to ensure where possible that data security is paramount.

Downloading Statements from my Online Banking site

If you feel you want to download copies of your statements from your Online Banking service then it is wise to download them, save them to an external medium such as a USB hard drive, flash pen or other optical media such as DVD or CD-ROM as part of computer security.

If you can print off the information you need then so much the better but however you save this information you should delete the downloaded copy as soon as you have finished with it for data security purposes. Do not leave it on your hard drive where it could be located if you were unfortunate enough to find yourself the victim of a hacker or Spyware and of identity theft.

All banks and building societies offer advice and free assistance when it comes to setting up your Online Banking account and also they can provide advice and support on what types of computer security you should employ for optimum data security.

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