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Is Online Banking Safe?

Beware the pitfalls of convenience when it comes to conducting transactions via the web.

This story appears in the May 2010 issue of Entrepreneur. Subscribe »

Although small-business owners are often encouraged by their banks to use online banking services, recent news about common tools of the trade hasn't been good.

Last November, the FBI issued a warning about a serious uptick in online banking fraud targeting small businesses, especially Automated Clearing House (ACH) transactions--which are used for direct deposit of payroll, vendor payments and the like--wire transfers and malware that steals sensitive information, including account numbers and passwords.

The problem is so bad that the Better Business Bureau has launched an initiative to help businesses keep all of their data--including sensitive banking information--secure. David Zetoony, an attorney with business law and litigation firm Bryan Cave in Washington, D.C., is the co-author of a free handbook published as part of the program, Data Security--Made Simpler. He offers the following tips for businesses that use online banking services:

Work with your bank.

"You should question your bank about what they're doing to protect your account," Zetoony says. Aside from checking your business accounts daily for unauthorized transactions, you should ask your banking representative whether the bank offers any other protections. Dual authorization--which requires two separate log-ins and authorizations from different people to process a transaction--is popular, he says.

Use a dedicated computer.

Online banking should be conducted on a dedicated computer that is operated only for the banking transactions and for virus and malware checks, then shut down, Zetoony says. This limits the ability of hackers to access information and makes it less likely that malware can be inadvertently installed and steal sensitive information. The computer should also be password-protected and used only by those who conduct online banking transactions.

Keep anti-virus and anti-malware protection up to date.

No virus or malware protection is perfect, but it's important to take advantage of the protection they do offer, Zetoony says. Check for updates each time you open your computer for banking transactions and run the updated software after each session.

Gwen Moran

Written By

GWEN MORAN is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).