In the mid-1990s, the world slowly discovered the wonders of online banking. Using a computer or smartphone, customers could pay bills, check their accounts, transfer money, and execute most routine financial transactions through the internet.
It was a huge leap forward in terms of convenience, but certain consumers needed time to warm up to the idea. Some were uncomfortable with technology overall, while others feared for the security of their information - particularly, their finances.
Since that time, however, security measures and encryption protocols have been strengthened to the point where many financial experts see online banking as the most secure option.
The measures in place
Financial institutions rely on a two-step verification process to make online transactions safer than ever.
"Two-step verification is a process that requires a user to input not only their username and password, but also a code that is sent to their smartphone or email," says Michael Ryan, a financial planner. "This code is generated by the financial institution and is unique for each log in. This extra verification step makes it much more difficult for hackers to gain access to someone's account, as they would need not only the username and password, but also the code."
Financial institutions have also implemented other security measures, such as encryption, to make online banking more secure.
As Ryan explains, the encryption process scrambles data so only the intended recipient can decode it. Essentially, encryption ensures that even if a hacker were to gain access to someone's account, the data would be unreadable and unusable.
Safe and secure
"Financial institutions have taken great strides to make online banking a safe and secure process," says Ryan. "Seniors should be aware of these security measures and feel confident that their money is safe when banking online."
If you've been reluctant to try online banking, talk to your bank. They'd be more than happy to take you through the set up and log-in process. Or, ask for a tutorial on how to use their system.
ReadySetBank.org, a website created by Capital One (but accessible to everyone), also offers videos and information about how online banking works to give consumers the tools and confidence they need to start banking online. The site includes a "practice area" that takes you through the process without having to access a real account.
Now that financial transactions can be completed from the palm of a hand, savers and shoppers alike have greater control over their finances. If you're like most people, once you get the hang of online banking, you'll never want to go back.