Is online banking safe?

From checking account balances to paying bills and sending money, online banking has reshaped the way people can manage their finances. In fact, more than 90% of adults in the UK used online banking in 2022.¹

This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.

In this guide, learn about using online banking and potential strategies for online banking security.

Is online banking safe to use?

Online banking is generally considered safe if platforms employ robust security measures to protect user information and transactions. To further enhance safety, users should learn about common scams, be aware of ways to identify potential security threats, and take appropriate measures to safeguard their information and assets.

Secure online banking best practices

There may be potential risks with online banking. But to make security a priority, there are several steps individuals can take to help protect their personal and financial information.

Here are some tips for online banking safety:

Type the bank’s web address into the browser

When accessing a bank’s website, manually type the bank’s web address into the browser instead of clicking on a link or relying on search engine results. This practice may help protect against phishing scams, malicious links, and URL spoofing.

By directly entering the web address, individuals can reduce the risk of accessing fake websites that aim to steal login credentials or personal information. It can also allow a web browser to verify the authenticity of the site and leverage advanced security features implemented by an online banking platform.

Use a passkey or set a unique password

Using a passkey as a login method may add improved security. Since passkeys are stored on a user’s device and not a remote server, they may be resistant to phishing and hacking attempts.

If a passkey is not available, following best practices for creating unique passwords is important. Here are some general suggestions to consider for password usage:

• Utilise 8–64 characters, using non-standard characters when possible.

• Do not reuse passwords across accounts.

• Reset passwords when they are compromised or forgotten.

• Consider using a password manager.

• Enable multi-factor authentication (MFA) whenever possible.

Use multi-factor authentication

Multi-factor authentication (MFA) is a security measure that can add an extra layer of protection to online banking accounts. It typically requires multiple forms of verification to ensure someone’s identity and prevent unauthorised access.

Here are some examples of verification types that may be used for MFA:

• Passwords and PINs

• One-time passcodes via SMS, mobile app, or phone call

• Third-party authentication apps

• Biometric authentication (e.g., finger, face)

• Security keys

Choose a financial entity with secure technology

If choosing an online banking platform, consider looking for options that prioritise advanced security features, such as fraud monitoring and website encryption. Speak with representatives to get a better understanding of a platform’s network security and ways to report fraud.

Avoid public Wi-Fi

Public Wi-Fi networks are typically unsecured and open to anyone within range. This can make them vulnerable to hackers and cybercriminals who can intercept and eavesdrop on someone’s online activities, including online banking.

They can also potentially capture login credentials, personal information, and banking details — stealing sensitive data without one’s knowledge. This makes it particularly important to never connect to public Wi-Fi networks or untrusted networks, especially when using online banking.

Use the provider’s official app

Many banks or online platforms will send official communications within an app. If someone received a suspicious email, they could log in to their app or online account and check their inbox or messaging tab to determine legitimacy of the email.

Many providers will have a link to download their app via their website or will share information to do so when someone opens an account.

How do banks protect money online?

Banks and financial platforms may implement various protocols and features to ensure the security of people’s money when using online banking. Here are some common practices:

• Encryption. Banks or other financial platforms may use strong encryption protocols to secure data transmitted between a user’s device and their servers. This ensures that financial information remains confidential.

• Multi-factor authentication (MFA). Most banks and financial platforms require multiple forms of verification, such as passwords, security questions, and one-time codes sent to your phone, to access your account.

• Firewalls. They often use firewalls to block unauthorised access and prevent malicious attacks.

• Fraud detection. Advanced algorithms may be used to monitor transactions for unusual activity, helping banks detect and block potential fraud and alert account holders of potential fraudulent activity.

• Regular software updates. They tend to keep their systems up to date with the latest security patches to protect against known vulnerabilities.

• Insurance. In the event of a breach, many banks and financial providers have insurance to cover losses so customers don't bear the financial burden.

Security measures may vary depending on the bank or financial platform. Learn about PayPal Security.