This article originally appeared as a column for the Cleveland Jewish News.
It’s 2016 and it seems that online banking is here to stay. After all, the majority of adults in the United States own mobile phones, and more than three-quarters of those are internet-enabled smartphones. Since 2011 when the Federal Reserve System board of governors began tracking such things, the use of mobile banking tools has increased significantly, from around 20 percent of smartphone users, to, now, more than half of smartphone users. Given that our population is nearly 324 million, that amounts to a lot of phones.
Most mobile banking users are checking account balances and monitoring transactions. A smaller, but growing, number are taking advantage of mobile deposit (generally done by taking and uploading photographs of the front and reverse of the check to be deposited) and online bill pay features. Some users, attracted by high interest rates on savings and certificate of deposit accounts, are even switching to online only banks such as Ally, or other names like Discover Bank, GE Capital Bank, Synchrony Bank, Sallie Mae Bank and Barclays Bank that are more recognizable for their loan and credit products.
Citibank customers in certain locations are now able to access ATM vestibules using a smartphone, a safer option than the more typical ATM card access. And banks like JPMorgan Chase and Bank of America have instituted “cardless cash” features at select ATMs, allowing users to make cash withdrawals using only a phone. Some banks are even experimenting with using geolocation technology to monitor customers in their brick and mortar branches to help customer wait times and improve customer experience.
Yet, even as available mobile services expand, one sometimes wonders how safe these mobile options can be. After all, it seems like high-profile security breaches are constantly in the news, and security concerns have been one of the top barriers to adoption of mobile banking technology. Fortunately, the law is such that the banks are responsible for losses due to cybercrime. That is, if a customer’s accounts are hacked and funds stolen, the bank – or the bank’s insurer – and not the consumer, will suffer the loss.
Of course, common sense security precautions are warranted as well. You can make your online banking experience safer by not sharing your account password or personal identification number, and choosing a password that is difficult to guess. (Passwords such as “123456..,” “qwerty,” and “password,” are among the most commonly chosen, as are other easily guessable things like names and birthdates.) When accessing your account from your phone, whenever possible, use the bank’s app rather than its website. Be wary of banking over publicly accessible Wi-Fi or on a public computer. And, of course, watch for new updates and keep your phone and your computer up to date with the latest security releases.
Somewhat paradoxically, by using mobile technology to regularly accessing your account you may be keeping your money safer. After all, if you only look at your balance when you get your monthly statement, days or even weeks may pass before you notice a fraudulent withdrawal. An online banking consumer on the other hand will likely notice the loss much more quickly and, as a result, get their funds back before they know it.
*Andrew Zashin writes about law for the Cleveland Jewish News. He is a co-managing partner with Zashin & Rich, with offices in Cleveland and Columbus.