Why You Should Not Rely on One Time Passwords to Guarantee Internet Banking Security
Online banking has definitely made our lives a lot more convenient, but with this convenience, we also have to deal with a lot of security issues. After all, it is important to ensure that your personal data and your financial information remain secure when you engage in online banking.
In this entry, we will discuss banking passwords and their limitations. Please note that relying on just one type of password may not work properly, as keeping your account safe requires complex effort. If, at the end of this entry, you will be ready to reset your passwords, we will consider our work done.
What is an OTP?
If you are into fandoms and fanfictions, you probably have a completely different term in mind. But no, we’re not talking about the “one true pairing” here. When it comes to online banking, OTP means “one-time password.” OTPs are often included in online payment steps, and they are required to validate your identity. Whether you often need to use OTPs or not depends on your bank and your account settings.
For example, a bank may require an OTP when you are about to make a bigger payment or when you are about to transfer a considerable amount of money. If that is the case, you should receive an OTP in a text message, and you should be given a timeframe (usually no more than two minutes) to enter the password you have received into the OTP box. OTPs are considered safe because they are valid only for a limited amount of time and they are sent directly to the individual mobile device. Not to mention you don’t need to reset passwords because they simply expire.
Limitations of a one-time password
Nevertheless, not everything about OTPs is nice and easy. For example, if a certain telecommunications infrastructure is overburdened, the OTP may not reach the user on time. What’s more, in rather rare cases when the telecommunications service is down, two-factor authentication or OTP dispatch may not even work. As a result, the user may have to reset the main passwords and confirm their identity through email to access their accounts again. This would only take time.
To avoid such limitations, some banks offer using third-party authentication apps (like Google’s Authenticator or Smart-ID) that generate one-time-codes within the smartphone, and users no longer need to depend on text messages. What’s more, you also don’t need to reset passwords anymore because you technically no longer use them.
Some also suggest that banks could issue OTPs through emails or through ATMs. Using your own credit card, you could get a printed slip of back-up OTPs that would allow you to access your account in the case of emergency. All in all, there are many ways to ensure that an OTP arrives on time, but, once again, we would like to point out that online banking security is a complex affair.
Your financial stability depends not only on the security measures employed by your bank but also on your own attitude and awareness. For example, the Chinese student who got swindled out of her savings in Singapore this month surely got all the OTPs on time, but she couldn’t differentiate between an actual emergency and a malicious scam. She gave away her login credentials and OTPs to crooks who pretended to be law enforcement officials, and they managed to steal more than $22,000 from the student’s account. This clearly shows that your financial security also depends on you, and you have to do everything in your power to minimize potential threats.
What do I have to do to improve my financial security?
Needless to say, if you still use various passwords to access your banking accounts, you might want to reset them. If you are wondering, why do I need to reset bank password frequently, the answer is very simple: The more often you reset your passwords, the harder it is for cyber criminals to hack into your account. Of course, the latest research data shows that virtually every online bank is vulnerable to a hacker attack. So, while nothing is fail-proof, you can always employ all sorts of measures to improve your online banking security.
On the other hand, we can look at the question “Why do I need to reset bank password frequently?” from another perspective. That is to say, why would you need to reset passwords manually? If you do not employ a third-party authentication app and you still use passwords, you should consider using a free password manager tool. It would save you a lot of time because you would no longer have to come up with passwords yourself.
What’s more, the password manager tool would help you generate strong passwords for every single account you have. As for password reset, it would also renew the passwords regularly, thus increasing the overall security level of your banking or any other account.Also, you should consider resetting your password if you think your account has been breached. But if that is the case, the first thing you should do is contact your bank to inform about the breach, so that they could secure your financial funds.
Hence, the bottom line is that one-time passwords are just a small part in the complex chain that maintains your internet banking security. They definitely provide a higher-level of security because they automatically expire without the need to reset them, but you shouldn’t forget that you also have to do your part. That is to say, do not reveal the OTPs to anyone, even if they say they belong to law enforcement authorities or financial institutions. OTPs should only go into the OTP boxes on the original online banking page.
Also, if possible, consider enabling two-factor or multi-factor authentication when logging in to your online banking account. We have covered the aspects of safe mobile bank app usage, but if you want to find out more about online banking, you should definitely address a consultant at your bank because each bank may offer different online banking options. Just choose the ones that fit your needs the most.