In this era of digitalization, most of our activities and ventures have moved online. More businesses than ever are pushing themselves to create a robust virtual presence for increasing sales and building a widespread customer base.
Despite the ease of this digital transition, it has also given rise to threats such as identity theft and cybercrime. Securing your financial identity online and protecting yourself from fraud and cyber-attacks has become more critical than ever. This article will discuss potential risks and strategies for securing your financial identity.
What Is Financial Identity?
Your financial identity is all the information associated with your financial profile, which includes your name, date of birth, Social Security number, banking accounts (including credit cards, investment, and loan accounts), credit history, financial behaviors and spending habits (saving patterns and risk tolerance), and more. This information is used to confirm your identity when conducting financial transactions.
What Are the Existing Threats to Your Financial Identity?
Your financial identity consists of highly personal information that can result in significant economic losses if accessed. The digital age has increased the channels criminals can access your financial information. There is a rise in threats such as:
Phishing attacks
Phishing attacks are emails, websites, or text messages that trick users into providing personal information. For example, email IDs similar to trusted brands are created in email phishing by only slightly changing the original. One can explore the alarming prevalence of phishing attacks through statistics stating that, in 2023, nearly nine million phishing attacks were detected worldwide.
Data breaches
A data breach occurs when hackers infiltrate an organization’s system or network and gain access to sensitive user information, such as credit card details and passwords. Financial institutions, social media platforms, and high-end retailers are the biggest targets of data breaches. High-profile attacks expose millions of users to identity theft. For example, the most significant data leakage, reported in March 2020 or the Cam4 data breach, exposed more than 10 billion data records.
Malware and ransomware
Hackers often use software called malware to infiltrate devices, steal sensitive information, and damage them. Some common forms of malware include trojans, spyware, and ransomware, all used to target personal devices such as computers or phones. For example, ransomware can lock you out of your device until you pay the “ransom,” while hackers can steal your personal information.
How to Protect Your Financial Identity Online?
Some strategies to protect yourself from fraud and potential identity theft on online platforms include:
Creating strong passwords
A password should be complex and difficult to breach. Avoid using standard information in your passwords, such as your name, birthday, or pet name. Create passwords that combine uppercase and lowercase letters, numbers, and symbols.
It is also advisable to keep your passwords unique for each online account you create to reduce the impact of a data breach. If somebody can deduce your password on one account, they may be unable to affect other accounts because of different passwords. If you occasionally forget your passwords, you must utilize reliable password managers like Google Password Manager to save and store all your passwords securely or generate complex ones.
Enable two-factor authentication (2FA)
2FA adds an extra step to the login process. Two-factor authentication can significantly deter unauthorized logins even if your password is known. It often requires verification through a code sent to your phone or email.
You may install authentication apps like Authenticator to enable effective 2FA or set up manual authentication through your contact number or email ID. For more robust security, you can also consider using biometric methods like fingerprint or facial recognition.
Be wary of phishing attacks
You must always double-check the sender’s email address and verify by searching the official email address on the web or calling your bank if they are sending such an email. For example, if you’re accessing a website like mycanadapayday, check if the website is official and has everything spelled correctly before providing personal information.
Another advisable action is to avoid clicking on suspicious links or attachments. Before clicking, hover your mouse over links to reveal their proper destination. If you need to resolve a matter with an institute or organization, access their websites directly through credible bookmarks or search engines and use the information provided.
Secure your devices
Your devices must be up-to-date and have adequate antivirus and firewalls installed. Using a firewall can help protect your device from unauthorized network access. The latest operating systems and software updates help update security patches and minimize phishing or hack attacks.
Avoid using public Wi-Fi for sensitive financial transactions since it is easily vulnerable to cyber attacks. Hackers can easily intercept your internet traffic, including sensitive financial information like login credentials and card numbers, making it extremely risky to conduct financial transactions. Instead, you may opt for secure private networks or use a VPN.
Endnote
With financial transactions shifting to online platforms, protecting our financial identities online is becoming increasingly difficult. It is crucial to identify potential threats in the virtual world, such as phishing attacks. Once you know the risks, you can take relevant action to protect your financial identity. These actions include using strong passwords, installing antivirus software, and using 2FA to ensure your financial identity is not compromised in the digital world.
