5 biggest online banking risks and how to avoid them (2024)

Banks are continuing to close branches, forcing more of us to embrace the digital world of online banking.

A recent study by National Seniors Australia found 80% of older Australians now do online banking or pay bills online – an increase of 8% since before the pandemic began.

As more of us have started using online banking, the numbers of scammers and hackers trying to steal our savings have increased too.

So how safe is online banking? And what can we do to protect ourselves from the scammers?

What is online banking?

Online banking ­offers many of the same services you can expect from visiting a bank branch, which you can access these anytime, anywhere:

• Pay bills
• Transfer money to other accounts
• Monitor payments coming in and out of your account
• View recent or older bank statements
• Set up or cancel direct debits.

To access online banking, you need a smartphone, tablet, or computer.

While most online banking websites or apps are designed to be easy to use, your bank should have a dedicated team that can help guide you through the process of setting it up and using it if you’re unsure where to start.

Online banking isn’t all or nothing either. You can use it as much or as little as you like in combination with your traditional banking services.

Many savings accounts, like National Seniors Money Manager, allow you to access online and mobile banking services (such as Apple Pay and Google Pay), alongside traditional banking services and products (including ATMs, banking outlets, Visa Debit cards and chequebooks).

Is online banking safe?

Many banks offer advanced safety features to help protect you and your money from illegal activity online, including dedicated anti-fraud teams, advanced online security technologies, and guarantees if money is stolen from you.

If you have money stolen due to a security issue from their end or if your credit card details are stolen, they will compensate you for it.

On the other hand, if you willingly hand over your details to a scammer (such as through an SMS, email or phone call scam), it may be difficult to get your money back and sometimes may not be able to be recovered.

The same goes if you accidentally send money to the wrong account (such as a typo in the recipient’s bank account) – so double and triple check before you complete your transfer.

Tips for safe online banking

1. Make sure your password is strong and unique, and secret:

   Ensure your password is difficult to guess by including a combination of lower- and upper-case letters, numbers, and symbols. Do not use personal information in your password or repeat passwords across multiple programs or accounts.

   Do not save your online banking password in your browser or to share it with anyone who isn’t an authorised signatory on your account.

   See Also

   Safe Deposit Box FAQs: How to Open a Safe Deposit Box

2. Install updates on your computer:As tedious as computer updates can be, they include security fixes. It’s important to install these updates as soon as possible when prompted by your device. This includes making sure your firewall, anti-virus and anti-spyware software are all up to date and automatic updates are turned on where available.
   
3. Use two-factor authentication:
   
   Two-factor authentication is a security measure that requires two steps to login instead of one. This usually means entering your username and password, and a security code sent to your phone or email as a secondary security measure. This makes it harder for hackers to access your account without also having access to your email or phone.

   For those that want an extra layer of security, some banks even offer multi-factor authentication for logins (meaning three or more steps are required).
   

4. Avoid using public Wi-Fi to do your banking:

   Accessing WiFi at your local shopping centre, cafe or public place is convenient but it is not secure for doing online banking or making payments. It is more secure to turn on your mobile data and only use WiFi where you can trust it. Never use a shared computer for online banking (such as at a library or at work).
   

5. Scams and fraudulent activity:
   
   Scams and fraudulent activity are one of the key reasons many older Australians avoid online banking but they are easier to avoid than you may think.

   Never give out your personal, credit card, or online account details over the phone (unless you made the phone call and got the number from a trusted source) or via email. Your bank will NEVER ask you to click on a link to enter your personal information such as username, password or security questions.

   If you give your account or card details to a scammer, it may not be possible to recover the money they steal. Taking the below steps can help prevent you from ending up in this situation:

   • Avoid opening emails or SMSs from addresses or phone numbers you don’t recognise and if you do, don’t click on any links inside the email.
   • Avoid answering calls from unknown or blocked numbers – allow calls instead to go to voicemail. If they are legitimate, they should leave you a voicemail explaining their reason for calling. You can also ‘google’ the number to see if there are complaints for it.
   • If in doubt, call the bank from their official number to verify. If it was not the bank, report the scam to the federal government’s Scamwatch website.

If you spot any suspicious or unauthorised transactions on your account, report it to your bank and change your password immediately. Your bank will usually have an after-hours number you can call to report fraudulent transactions. Some banks even allow you to temporarily lock your account through online banking if you suspect fraudulent transactions may be occurring. If money is stolen from your account through no fault of your own (such as somebody skimming your credit card), the bank will usually conduct an investigation. If it’s determined the transactions or transfers are fraudulent, then the money should be returned to you.

What are the benefits of online banking?

• Instant access to your account information in real-time: You don’t need to make a special trip to the ATM or the bank teller to check your account balance. Simply login to your online banking app or website and see your account information live.
• Do your banking anywhere, any time: Provided you have access to internet or mobile data, you can access your account online wherever you are and at any time of day or night.
• It’s easy to set up automatic payments: If you have regular monthly bills to pay, you can set up an automated payment to ensure it’s always paid on time.

When to visit a bank in person

• Making cash deposits or withdrawals: This one unfortunately can’t be done online. You will still need to visit a branch to make cash deposits or withdrawals (or visit an ATM for withdrawals).
• Use Bank@Post services: Another in-person only facility offered by some banks (including National Seniors Money Manager) is the Bank@Post service, which allows you to use your debit card over the counter to withdraw, deposit, or check your bank balance.
• Help with complex transactions: It can often be simpler to visit your bank in person to sort out more complex enquiries.
• Changing signatories or opening a new account: A lot of the time, this will need to be done in person in a branch, however some banks, like National Seniors Money Manager, will allow you to set up a new account online or over the phone.

Sources: Be Connected & ACCC.

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