One of the biggest worries surrounding any online banking practice is that the customer might become vulnerable to attempts to steal his or her information. Internet fraud is one of the more frightening forms of fraud in the world today, as it would allow a fraudster to steal another person’s information and make purchases using that person’s accounts without ever having to leave home.
Though it is often illegal to obtain the kind of information that would threaten online banking, whether through the Electronic Communications Privacy Act of 1986 or through some other Act, there will always be those who attempt to obtain such information. Thus, methods to support and strengthen online privacy in online banking are quite important to the overall success of online banking.
After all, despite its relative inconvenience, the risks of someone stealing a customer’s information when that customer physically goes to a bank to make a deposit seem substantially lower than when a customer puts his or her information into the Internet.
Fortunately, as this concern has been at the core of online banking practices since their inception, many improvements and moves towards greater online privacy have been made over the years. In general, a website might use a single password coupled with an email address in order to provide protection for an account, but online banking services long ago deemed this insufficient for protecting its customers and their accounts, as a single password is too easy to break for a determined hacker.
Instead, online banking primarily uses two means for security. One system uses the Personal Identification Number (PIN) associated with a given account coupled with a Transaction Authentication Number (TAN) to perform a transaction. Where a PIN is always the same with the same account, a TAN would be different for every transaction.
The system is more complex than this, but essentially, it ensures that online banking conducted with the use of web browsers capable of a secure kind of transaction would be able to maintain online privacy successfully.
The other system of protecting online privacy in online banking uses encryption and keys, where all transactions are encrypted and can only be decrypted by temporary keys given to the computer after the transaction.
Users can protect their own online privacy and their online banking practices by ensuring that their computers are safe. Antiviral programs can run periodic scans on computer systems in order to ensure that no viruses or other bugs are inside the computer which would then violate online privacy when performing online banking.
But a large number of schemes to penetrate online privacy instead focus on tricking the bank’s customer into giving away information such that the fraudster can use the account without authorization. Often, the best defense and aid to online privacy is common sense and a reluctance to give out information to anything other than trusted sites, thereby eliminating most chances that a fraudster might be able to violate online banking security and privacy.
Governmentally speaking, one’s online privacy is enforced and supported under law. The Financial Services Modernization Act of 1999, for instance, ensures that banks provide customers with a notice explaining those banks’ privacy rules and where the information of the user’s account might go. The customer can then decide whether or not conforming with those rules is in his or her best interests. This prevents customers from being caught unawares when their online privacy might not be as secure as they would have thought simply because of the banks’ policies.
The Right to Financial Privacy Act also applies, ensuring that banks cannot give the financial information of a customer to a Government agency without that customer’s permission. Online banking would be affected by this, just as much as regular banking. In other words, the law is, in general, on the side of online privacy, though there have yet to be a definitive set of laws which would codify the terms of online privacy.