January 26, 2021
How Banks Protect Your Personal Information
Banks have been around for centuries tracing back to Sumerian and ancient Greece. They are easily the most guarded building in any city. However, as technology advanced, banks began to face a new kind of threat.
The American Banking Association estimates that banks suffered fraud losses to the tune of $22.3 billion in 2018. To cope with this growing threat, banks have to beef up their security consistently. Here are the ways banks protect your personal information.
Authentication guidelines require you to confirm your identity before every transaction. This applies to all customers and all forms of access, including ATMs, mobile applications, credit cards, and debit cards. Typical forms of identification used include a password, pin, or being in possession of the debit and credit cards.
Multi Factor authentication means that you are only granted access after presenting two proofs of your identity. This provides layers of security so that even if your card falls into the wrong hands, it can’t be used without a pin. The authentication elements can be three more, depending on the level of security. Modern methods include facial recognition and fingerprints.
As banking moves to online platforms, the risk of hacking is ever-present. One way to protect your information is through encryption. Encrypted data is jumbled up and unreadable without the key. This protects your information from being used should it be intercepted.
The level of the security key depends on the length of the encryption key. Banks use Advanced Encryption Standards, which require key lengths above 128 bits. The technology is used in protecting credit card information and securing online transactions.
Privacy policies are a set of rules that dictate when and how banks can share your personal information with third-party entities. If a bank has to share private information with non-affiliated third parties, it has to offer the consumers the chance to out their opinions and adequate time for them to do so.
Banks train their employees to treat your personal information with the utmost care. Violation of the privacy laws can attract huge penalties, sanction, and destroy the bank’s reputation. Read your bank’s policy for more insight on this.
Audit trails refer to the chronological documentation of a customer’s interaction with the system. These records are used to track any transaction that happens in an account. It makes it possible to track the data to its source.
Although banks are responsible for protecting their customers’ information, they can be held liable if they allow illegal transactions, such as money laundering, to occur. Audit trails provide a means of tracing the transaction by following the paper trail. A bank can also use the record to demonstrate its compliance with regulations.
As you can see, banks do everything in their power to protect your personal information. It is also a requirement by law. Banking is a business of trust, and it is in their best interest to keep your information safe. However, the security of your personal information starts with you. All their security measures are useless if you are careless with your banking information. Always alert the bank if you suspect any suspicious activities on your account.