Online banking

Posted Date: 19 Feb 2008 Resource Type: Articles/Knowledge Sharing Category: General

Posted By: Deepu Member Level: Diamond
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Online banking or Internet banking allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank credit union or building societyProtection through single password authentication as is the case in most secure Internet shopping sites is not considered secure enough for personal online banking applications in some countries Online banking user interfaces are secure sites generally employing the https protocol and traffic of all information including the password is encrypted making it next to impossible for a third party to obtain or modify information after it is sent However encryption alone does not rule out the possibility of hackers gaining access to vulnerable home PCs and intercepting the password as it is typed in keystroke logging There is also the danger of password cracking and physical theft of passwords written down by careless users

Many online banking services therefore impose a second layer of security Strategies vary but a common method is the use of transaction numbers or TANs which are essentially single use passwords Another strategy is the use of two passwords only random parts of which are entered at the start of every online banking session This is however slightly less secure than the TAN alternative and more inconvenient for the user A third option is providing customers with security token devices capable of generating single use passwords unique to the customer's token this is called twofactor authentication or FA Another option is using digital certificates which digitally sign or authenticate the transactions by linking them to the physical device eg computer mobile phone etc Other banks have responded not with security tokens or digital certificates but by setting up a combination of controls that recognize a customer's computer ask additional challenge questions for risky behavior and monitor for fraudulent behaviorA credit union is a cooperative financial institution that is owned and controlled by its members Credit unions differ from banks and other financial institutions in that the members who have accounts in the credit union are the owners of the credit unionCredit union policies governing interest rates and other matters are set by a volunteer Board of Directors elected by and from the membership itself Only a member of a credit union may deposit money with the credit union or borrow money from itAs such credit unions have historically marketed themselves as providing superior member service and being committed to helping members improve their financial health

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