Why Online Banking is Safer Than Your Local Bank

02.07.07 | Online Banking | 1 Comment | by junger

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It's no question that I'm a fan of online banking, especially considering how brick and mortar banks treat their customers.

One of the reasons, it seems, more people are hesitant to jump into online banking is the safety issue.

But online banking is safe. In fact, it's even safer than your local brick and mortar, argues Liz Pulliam Weston at MSN Money.

People who bank entirely online, according to researcher James Van Dyke, can reduce their chances of becoming identity theft victims by about 10%.

Those who choose to do so, though, are definitely in the minority. While one out of every three Internet-enabled households does some banking online, and one in six pays bills, only about one in 10 forgoes paper statements, said Van Dyke, founder of Javelin Strategy & Research in Pleasanton, Calif.

Interestingly, Van Dyke thinks more consumers would sign up for paperless options if banks and other financial institutions would get their act together.

If you're considering going completely paperless, Weston provides these tips:

  1. Raise your armor. Basically, make sure your computer doesn't have viruses, spyware and the like. You should probably be doing this anyway.
  2. Monitor your accounts. Like raising your armor, you should be doing this anyway. I log onto my accounts so I can fill in my budget, so I'm in there multiple times per week.
  3. Sign up for any e-mail alerts offered. Not sure that I necessarily agree with this, considering that pretty much any institution will send you unnecessary emails, like mortgage offers and credit card approvals. But you make the call.
  4. Don't fall for phishing. If something seems odd, you probably should not be giving away your ATM pin or Social Security number. It's a given.

Online banking really comes down to common sense.

Would you give your ATM card to someone standing in the lobby of the brick and mortar bank? No.

Would you leave cash sticking out of your pocket, waiting for someone to grab it? Probably not.

It's the same idea online.

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