Online banking is much, much more than simply punching in your codes
at the nearest ATM, and the breadth of services available to you are
growing fast. In fact, some banks do not have branches located in
brick buildings at all, but are operating competitively in
the "online" world offering all the services "traditional" banks have
offered in the past (Top 5 Sites) .
Getting Started
So, what should you consider before making the leap in to cyber-
banking? Probably the first thing to consider is whether you have
the "connections". The simplest online connection you need is dial-up
internet access from your computer. With this, you are now able to
make a connection with your existing bank or surf other banks to open
an account, request a loan, etc. If you have an existing bank
account, many banks are making it easy for you to "enable" online
access to your accounts. Check with your bank, the process of getting
online access to your existing accounts is fairly easy – and you
should be able to do this online. (Note: When converting my existing
account to online banking at the RBC the process wouldn't let me do
it online. I had to call in to their office during business hours,
but the process was fairly simple and the telephone support was very
good.)
They will guide you through a simple process, setting you up with
your account # and password. Guard these carefully! – they are just
as important as your ATM PIN #'s.
Is Online Banking Safe?
The banks have been doing their bit. The security of most internet banks has improved as has their reliability. Many banks now require users to input random numbers from pass codes, making things more difficult for would-be hackers.
All internet banking sites are encrypted, which means that all the information you send is scrambled when it leaves your computer and then decoded at the bank's end. This means that anyone eavesdropping on your transmissions can’t see what you're doing.
Protect yourself The weak points in internet bank security are you and your computer. Which means you should take some steps to protect yourself:
• Get a decent password and change it every two months. In a recent study of bank security, some 40% of respondents used the word ‘password’ as their password. If you fall into that group, stop being so silly.
• Make sure that your bank’s site is encrypted before you enter any personal details. You can check that a site is encrypted by looking at the address. If the address starts with https (rather than http) then you are safe.
• Install a reputable anti-virus programme on your computer to protect yourself against viruses that record the keys you press (logger viruses), giving hackers the ability to see what you are doing in your computer.
• Make sure your browser is the latest version. Free updates are available for both Window’s Explorer and Nestcape, the two most popular browsers, from their websites. The latest versions are safer than the earlier ones.
• Avoid using internet cafes to access your online bank. Computers in these cafes are more likely to have viruses that will give away your password. There's also a chance that the next person to use the computer might stumble across details you have unwittingly left there.
• Don’t give any banking details out using email. Email’s are not secure and are relatively easy to snoop on. It's highly unlikely your bank will ask you for any information by email - be very suspicious of any such contact.
• Be wary of the growing scam called ‘phishing’ or ‘spoofing’. This is where crooks set up fake banking sites then send emails to people to get them to visit the site and give away their details. If you have any doubts then contact your bank directly and ask them to verify an email you have received.
What Can Online Banking Do For Me?
The services available to you are growing monthly. To be fair to the
banks, they are playing catch-up to some of the services being
offered by auction payment systems which in a way have "blazed the
trail" for online payments. New e-money currency, "wallets" and
payment systems have filled a gap in the market place that banks are
looking to recover. The ones that really want your business won't
make it difficult for you to do business with them. As we all know,
nothing is more frustrating than spending your time and energy trying
to use your bank's "online" services only to find that an hour later
you see a message saying "please visit your nearest branch to….".
So what should you expect? Here is a list of basic services that I
believe you should be able to expect from your online bank (and of
course, the list keeps growing).
• Open a new account
• Check credit card balances
• Check your mortgage balances
• Make bill payments
• Schedule automatic bill payments for regular bills
• Make credit card bill payments
• Apply for a loan
• Apply for a mortgage
• Transfer funds between accounts
• Ability to send and receive checks online
• Check your brokerage account and trade stocks or mutual funds
• Wireless banking access
I should note that when comparing some of the services offered by US
banks vs. Canadian banks, it appears that Canadian banks are slower
to offer important basic online services such as sending and
receiving checks and payments. Hopefully they will catch up in the
coming months.
Advantages of Online Banks
The advantages of convenience and speed for online banking are
obvious. You have the ability to do your business when it is most
convenient to you, at any time of day with no line-ups and no
waiting. Transactions are most often executed and confirmed instantly
or during the next business day. And of course, with the increased
competition that comes with consumers having more knowledge and
easier access to competitors, the price differences are worth
comparing. For certain basic services the "virtual" banks that only
operate online have better rates as compared against some of the
traditional institutions that have to maintain their branches and
buildings.
