How Safe is Online Banking?

By now, most of us do at least some of our banking online. We have become accustomed to pulling out a smartphone to transfer funds, make deposits, or check on transactions. Every time we log onto our bank through the internet, it’s a risk and one that hackers are waiting for.

The Dangers of Online Banking

Besides the obvious dangers of online banking, there are some dangers you may not be aware of. If you connect to your bank accounts and credit card companies using a shared computer in your house, you may be at serious risk of hacking.

Kids and others using the computer may not take the same security and privacy precautions that you would, thus possibly infecting the computer with malware, ransomware, or spyware. Hackers can use these programs to track your online activity, steal credentials (including the login to your bank) and even capture keystrokes to record passwords or PINs, giving them everything they need to drain your accounts.

If you access your bank account using your mobile device and connect to a public Wi-Fi hotspot, you could be the victim of a man-in-the-middle attack where nearby scammers sniff out open connections and intercept the traffic, stealing logins and more.

There is nothing wrong with using the convenience of online banking; however, take the maximum precautions when doing so and follow the tips below for online banking best practices.

Online Banking Best Practices

The absolute best way to avoid exposure of your personal bank accounts when doing business online is through a dedicated machine. KrebsonSecurity calls this a “clean computer.” Meaning that you wipe it out, completely reinstall the operating system and install very few additional apps. You can also use a Live CD approach (see below for instructions).

Make your dedicated computer “off-limits” to anyone else in the household. You cannot make exceptions here. One quick browsing session and the entire computer could be compromised. 

You can also restrict traffic for this machine by using a tool like OpenDNS, where you set only specific URLs that the computer can visit, such as your bank and credit card sites. That way, you’ll never end up on a malicious website that infects your computer. You can also accomplish this using a host file, firewall rules, or other DNS tools.

Threat experts also recommend that you use a Linux or Mac operating system and not Windows. Windows is inherently susceptible to hacking, malware, and viruses. The majority of malware is written specifically for Windows machines. You can also use a Live CD to boot your Windows PC into a Linux or other operating-system mode while you do your banking. Since you are running the operating system off a CD and not a hard drive, your system cannot be infected during the session.

Other best practice tips for online banking include:

• If you use a non-dedicated computer to check emails, never click the links, especially if they look like they came from your bank. Scammers are very good at making fake emails look legitimate, and they always want you to click a link to visit a site and enter your credentials. Check the headers of emails to ensure they came from the listed sender. Never open attachments from emails unless you are 100% sure you know where it came from.
• Keep your operating system updated with the latest security patches. Update all apps too. Be sure to update any browsers and browser exertions. These are vulnerable areas for hacking. 
• Never install third-party apps from untrusted sources.
• Bookmark the links to your banks and credit cards. You don’t want to accidentally end up on a fraudulent site that uses a URL that is dangerously close to the real one.
• Remove all unused software from your computer. The fewer programs, the less susceptible you will be to hacking. 
• Install and use strong antivirus/anti-malware software. Run deep scans of the entire computer regularly. Keep that software updated daily. Things change quickly as new strains of malware emerge. 
• Sign up for 2FA or multi-factor authentication with all your banks and credit cards. That will require more than 1 step to gain access to your accounts.
• Watch out for phishing emails and other scams. Never trust anything that comes through email or social media. Social engineering is a tactic widely used by hackers to gain your trust, so you hand over private information. 
• Your best defense against attacks on your bank accounts and assets are awareness and common sense. The more you know about securing your stuff, the better.

What is a Live CD?

A live CD is a CD that contains a bootable copy of an operating system. You can then insert it into your computer CD drive and boot the computer temporarily using it as a new install. It’s a very clean way to boot the computer into a safe environment for performing banking tasks. You can then remove the disk and boot the computer regularly. Any malicious files installed on the machine won’t be able to interact with your session working off a Live CD. To learn how to create one, read this primer here.