As electronic
banking increasingly becomes the favored means of moving money, the security
risks posed by online transfers continue to proliferate. At Watters Financial
Services, LLC we strive to educate all of our clients about identity theft.
This article from Wealth Management Systems Inc. provides many important facts
about fraud prevention and moving money online. We highly recommend it to all
of our clients and we will be sponsoring a Client Shredding Event on April, 30th
to help our clients keep their identities safe.
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How
serious is your bank about online security? Compare its practices with these
common protections.
As electronic
banking increasingly becomes the preferred means of conducting financial
transactions for consumers and businesses alike, the security risks posed by
online money transfer continue to proliferate.
For their part,
banks have a vested interest in keeping their customers' assets and
confidential information secure. That is why the banking industry as a whole
has developed a series of standard security protocols and techniques designed
to do just that.
Common Fraud
Protections
Following are
general protections offered by most banks. Be sure to compare this list against
the measures your own banking partners have put in place to keep your identity
and assets safe as you bank online with them.
Firewalls -- Firewalls are
software or hardware-based security systems that create a secure barrier
between your bank's internal network, where your information is stored, and the
unsecured Internet. The data "traffic" flowing in and out of the
bank's network is monitored and analyzed to determine its legitimacy.
Encryption -- Encryption
scrambles information being transmitted between your device and the bank's
network into a code that is virtually impossible to decipher, thereby
protecting against unauthorized access. Many financial institutions now use
128-bit encryption, an advanced encryption technology.
Multilayered
Authentication
-- Many online banking/financial systems now require many layers of user
identification, or authentication, that only those authorized can provide. For
instance, some authentication protocols verify the device the customer is using
to access the bank's website. If the device does not match the bank's records,
additional authentication measures, such as one or more challenge questions,
will be presented to the customer. Similarly, commercial online banking also
applies a layered security approach whereby two or more identifying factors are
required to gain access (e.g., a username and password plus a security token).
Monitoring -- Keeping
vigilant watch over network operations is integral to the online security policies
of most banks. Technology specialists continuously monitor online activity
looking for out of the norm customer behavior and/or suspicious activity,
particularly at login. For instance, too many incorrect login attempts will
signal the system to lock a user out of their account until positive account
verification can be confirmed. Transaction amounts (specifically withdrawals)
that fall outside the customer's normal or pre-established limits are also
scrutinized.
Industry
partnerships
-- Aside from internal controls, many banking institutions work closely with
anti-virus and anti-malware vendors, sharing data they have collected and
collaborating on new online fraud prevention techniques. Similarly, banks often
work with law enforcement agencies, sharing information that may lead to safer
online experiences for their customers.
The Ultimate
Protection
As sophisticated
as the banking industry's security measures have become, there is no substitute
for a well-educated and aware customer. Toward that end, a bank's customer
awareness and educational efforts should address both retail and commercial
account holders and, at a minimum, include the following elements:
·
An
explanation of protections provided, and not provided, to account holders
relative to electronic funds transfers
·
An
explanation of under what, if any, circumstances and through what means the
institution may contact a customer on an unsolicited basis and request
confidential account-related credentials
·
A
list of risk control measures that customers may consider implementing to
mitigate their own risk
·
A
list of appropriate contacts for customers to use if they notice suspicious
account activity or experience security-related events
Source/Disclaimer:
Source: The
Federal Financial Institutions Examination Council (FFIEC), "FFIEC
Supplement to Authentication in an Internet Banking Environment,"
June 29, 2011.
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Because of the possibility of human or mechanical error by Wealth Management
Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its
sources guarantees the accuracy, adequacy, completeness or availability of any
information and is not responsible for any errors or omissions or for the
results obtained from the use of such information. In no event shall Wealth
Management Systems Inc. be liable for any indirect, special or consequential
damages in connection with subscriber's or others' use of the content.
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Management Systems Inc. All rights reserved.
