Why Cybersecurity Is Key To Safeguarding Your Finances

Today's financial transactions are increasingly defined by the digital space, and traditional security measures are often insufficient in addressing this area of the market. The convenience of processing a transaction from a handheld device has enabled quicker, seamless navigation of the financial landscape, but a device's built-in protections aren't always strong enough against online threats. The financial industry is especially susceptible to cybercriminals and suffers some of the highest costs when faced with data breaches. Specialized cybersecurity methods are essential to mitigating risks to financial data, and a VPN (Virtual Private Network) can help to start addressing these online safety concerns.

Cyber Safety in Addition to Security

Before implementing additional cybersecurity methods, it is important to practice cyber safety. One of the easiest ways for a cybercriminal to attack your finances is to have you do it yourself. A customer account takeover often starts with a simple phishing email or text message appearing to come from a legitimate source, but asking for information such as account number, password, social security number, or credit card information. Financial entities never ask for this information by email.

An identity thief may also use malicious software to intercept usernames and passwords. Clicking on a malicious link can download software onto your device, risking the exposure of your personal information and that of the wider network your device may be connected to.

Most institutions offer alerts to notify you whenever a change is made to your account, and it is important to enable these safeguards. A strong password may be harder to keep track of, but writing it down or getting a password manager will lower the likelihood of someone guessing your password. In addition to this, enabling multi-factor authentication ties physical identifiers or passwords sent to your device to log in, making it less likely for a cybercriminal to take over your account. Some companies may call to confirm the validity of an abnormal purchase, but the rise of artificial intelligence and its ability to mimic human voices with a good degree of accuracy puts this practice into question.

Public WiFi and hotspots, like those available at libraries, coffee shops, and grocery stores, reduce their security settings for ease of customer access. This makes it easier for hackers to intercept information or mimic a legitimate network. A VPN application can help prevent this issue by encrypting the data you send over the internet, protecting your identity, and adding security to any financial transactions made in a public setting. Publicly available cords and USB ports are also to be avoided since these can directly upload malware or steal data from your personal device.

If your account is breached, especially a financial account, it is important to change that account's username and password, as well as any of your other accounts that use the same information.

If Big Companies Can Get a Data Breach, So Can You

A recent data breach following a hack of the Florida-based National Public Data network suggests that more than 2.9 billion records have been left vulnerable. This data was released onto the dark web by the group responsible, and the event is considered by experts to be one of the worst data breaches ever. Considering that only 330 million people live in the United States, the number of vulnerable records and accounts, including Social Security numbers, phone numbers, and addresses, is astonishing. Even in less exceptional circumstances, it is important to practice cyber safety.

Cybersecurity Methods to Protect Your Finances

Financial institutions are obligated to protect their users' data and important financial information, but personal cybersecurity is a crucial barrier against cybercriminals when navigating online. Identity theft is a major concern for personal cybersecurity, though data leaks, including personal information, can happen from the institution's end.

There are several methods for improving cybersecurity in addition to the practical cyber safety methods mentioned. Keeping your software, operating system, and browser up to date is a simple, but effective method of introducing new security features that are automatically included in updates. Running a reputable anti-virus product can address an existing infection while preventing a device from becoming infected in the first place. Additionally, you should only give permission to your applications when necessary. If you store financial records in your photos, an app that can access photos may have that information. In a similar vein, you should only download applications from first-party platforms such as Google Play or the Apple App Store. 

A more physical method includes shredding or otherwise destroying financial documents that are no longer necessary to keep but might have information that cybercriminals could use to access your records. The same applies to emails and text messages containing sensitive data; since an account breach could happen at an unexpected time, these resources should not be available to hackers in such an event. 

Purchasing an entirely different device for handling financial transactions is another great method, as it separates you from your financial activities. A separate SIM card would achieve a similar result, but a different device allows for more convenience at an admittedly higher cost. However, this does not eliminate the need to adhere to general cyber safety rules or implement cybersecurity measures.

Regularly monitoring your finances is another important part of cybersecurity. Online access to your financial statements and records does mean that you need to protect this information, but it also enables you to track malicious activity yourself. Whenever suspicious activity occurs on your account, most financial institutions allow you to flag this activity and investigate the transaction, preventing unexpected or illegal purchases from being made with your financial information. 

Financial Safety Online

The ability to perform online financial transactions has undoubtedly accelerated and expanded the market and its many opportunities, but at the same time, it has opened new avenues for attack and fraud. By practicing cyber safety and implementing additional cybersecurity methods, these risks can be mitigated or avoided altogether. Vigilance in these efforts will ensure that your finances are as safe as possible in the event of data breaches and that you know the proper measures to take if and when they occur.

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This post was authored by an external contributor and does not represent Benzinga’s opinions and has not been edited for content. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice. Benzinga does not make any recommendation to buy or sell any security or any representation about the financial condition of any company.