In today’s digital age, the internet has made our lives incredibly convenient. With just a click of a mouse button or a swipe of a screen, we can manage various aspects of our lives – banking included. Online banking has become an increasingly popular choice for many people due to factors such as lower fees and ease of use.
However, security issues surrounding online banking still leave many people skeptical. So, when it comes to comparing online banking and traditional brick-and-mortar banks, which one is actually safer? CNBC’s Select column has raised some perspectives on this issue, let’s delve into them together.
One of the most crucial aspects in determining the safety of a bank is whether it has official protection. In the United States, this means whether your deposits are protected by the Federal Deposit Insurance Corporation (FDIC). In case of a bank’s bankruptcy, the FDIC provides compensation up to $250,000 per person per account type. Traditional banks typically have this protection in place, and many legitimate online banks do as well.
However, it’s important to note that there are some financial technology companies out there that operate under the “bank” banner but are not actual banks in the traditional sense. They often just partner with institutions that have FDIC qualifications to store customers’ funds. Undoubtedly, opting for a legitimate online bank with an actual banking license rather than such financial entities is a wiser choice. You can easily verify a bank’s qualifications through the FDIC’s official website’s search tool.
In reality, both traditional banks and online banks usually employ encryption technology to transform your sensitive data into codes that only the bank’s internal systems can decipher, ensuring the security of customer information and transactions.
Additionally, to prevent unauthorized access, both types of banks implement multi-factor authentication. For instance, when using a bank card, besides entering a password, you may also need to verify your identity through fingerprint or facial recognition, or receive a one-time verification code on your mobile phone to access your account. Some banks also run additional verification processes in the background to ensure security.
Even if the bank provides robust security measures, your own actions are critical. Firstly, it’s essential to set unique passwords that are not shared with other accounts (such as email or social platforms). You can use password management tools to generate and store more complex passwords.
Secondly, enable two-factor authentication settings, where apart from entering a password during login, you also need to input a one-time verification code received on your mobile phone, significantly increasing the difficulty for hackers to breach. Lastly, make use of additional features provided by the bank, such as alerts for unusual logins and transaction activities or biometric login, to promptly detect any anomalies.
There are plenty of online banks with high security measures available in the market. For instance, certain legitimate online banks not only have FDIC insurance but also offer features like firewalls, antivirus protection, and automatic logout functions to ensure that accounts lock automatically when idle. Some even provide free security software that can be used across multiple devices, further safeguarding your digital assets.
In conclusion, the security of a legitimate online bank is no less than that of a traditional brick-and-mortar bank. As long as you choose the right bank and practice personal precautions, your funds can be adequately protected. In the digital era, security no longer solely depends on the type of bank but more on how you select and manage it.