Is Online Banking Safe?

Online banking is a safe, secure way to manage cash flow and ensure both debits and credits to an account are completed in a timely manner.
Of course, the user must be well-versed in the rules as defined by his or her particular financial institution. Once familiar with them, significant advantages to making online transactions can be captured. Among them are avoiding charges for late transactions; being able to access an up-to-date register and avoiding postage and handling charges.
Additionally, once set up, an online banking system can generate account alerts for balances, transfers, deposits, even identifying questionable transactions. And with applications that are compatible with cell phones, the user can be advised instantaneously of any activity on the account. "Online banking is safe when sufficient precautions are taken to ensure the prevention of interception of data. The first line of defense is the use of an encryption method known as Secure Sockets Layer or ""SSL,"" an online banking user can tell if the website is using an SSL connection by looking for a padlock icon on the bottom of the major Internet browsers (Internet Explorer, Firefox and Safari). An additional layer of security comes from banks using challenge questions that a customer sets up to vet a computer the first time a customer uses it to login to an online banking session. The additional layer of authentication makes it necessary for a hacker to obtain much more than just a password to access a customer's online banking account, this is known as Two-Factor Authentication.
Many banks go further than Two-Factor Authentication by using something called Multi-Factor authentication to prevent unauthorized access. For example besides entering the correct user ID and password, the bank's server will verify that the activity isn't unusual for the customer’s account- such as logging in from a foreign country when they normally only login from their home computer. If the server detects unusual activity, it would ask additional challenge questions that only the customer would be likely to know before allowing the login attempt to proceed. There are also many banks that have a ""Zero-Liability"" policy to reimburse their customers for losses arising from unauthorized access to their online banking accounts when the customer follows the bank's safety procedures. Therefore, online banking can be a safe way to conduct online banking if one uses reasonable caution, knows their bank's security features/policies and reasonably follows the bank's security policies so that even in the event the online account is compromised, any losses are covered by the banking institution."