Financial Accounts: Securing Your Online Financial Accounts

Since more and more people are spending time online, cybercriminals are always planning ways to steal your data while lurking in the shadows. You have a crucial role to play even though financial organizations are required to protect your personal financial information.

What Is A Financial Account?

A financial account, as used in macroeconomics, is an element of a nation’s balance of payments that accounts for obligations or claims against nonresidents, particularly about financial assets. Reserve assets categorized by industry, portfolio investments, and direct investments are the components of financial accounts.

Financial claims made by nonresidents against residents’ assets are recorded as liabilities in a nation’s balance of payments, whereas resident claims against nonresidents are recorded as assets.

Knowing How to Interpret Financial Accounts

The financial account, which is divided into two subaccounts, serves as a tracking tool for changes in the ownership of foreign assets.

Foreign assets owned by domestics, such as foreign bank accounts and securities held by foreign corporations, are included in the first subaccount.

Foreign ownership of domestic assets is included in the second subaccount. Examples of this include loans given to domestic banks by foreign organizations or the acquisition of government bonds by foreign businesses.

To examine potential increases and decreases in the financial account, the following scenarios for the US financial account will be examined:

A negative figure indicates a financial outflow and a decline in the U.S. financial account when there is an increase in U.S.-owned foreign assets overseas.

On the other hand, a decline in US-owned foreign assets overseas is regarded as a financial inflow and results in a rise in the financial account, which is represented by a positive figure.

A growth in foreign-owned assets indicates a financial inflow and boosts the United States’ financial account, which displays a positive value.

On the other hand, a decline in foreign-owned assets in the United States represents a financial outflow and lowers the country’s financial account, which displays a negative value.

Comparing a Capital and Current Account

The capital account documents transfers of capital assets, which is how it varies from the financial account. A nation’s total income, rate of savings, or production levels are unaffected by transactions in the capital account.

The current account tracks the import and export of goods and services and represents the nation’s current trade balance along with net income and direct payments. The three accounts together with the capital and finance accounts make up a nation’s balance of payments.

Recording Transactions

Financial assets including gold, cash, bonds, special drawing rights, shares, and derivatives are all included in the financial account. A nation may record a portion of a transaction in its capital account and the remaining portion in its current account during a complex transaction that involves capital assets and financial claims.

Furthermore, even in cases when transactions take place between residents and non-residents, entries in the financial account may not show up in a nation’s balance of payments since they are net entries that balance credits with debits.

Advantages and Drawbacks of Greater Access

Liberalizing financial accounts makes a nation more accessible to capital markets, and easing capital access is seen as a step toward greater economic liberalization.

Reducing the financial account’s restrictions is not without risk, though. The possibility that economic problems overseas will have an impact on home conditions increases with a nation’s level of economic integration. Weighed against the possible advantages are reduced funding costs, access to international capital markets, and enhanced efficiency.

What Constitutes a Financial Account’s Balance?

The total of net direct investments, net portfolio investments, asset funding, and mistakes and omissions determines a financial account’s balance.

What Is a Financial Account and a Current Account?

The current account measures the transfers between citizens of the United States and other countries by keeping track of imports and exports, or the flow of products into and out of a nation. A financial account calculates the shift in a nation’s ownership of international assets.

Does the Money Account Have a Constant Balance?

The financial and capital accounts balance each other out, thus the total of these accounts—the balance of payments—will equal zero because the current account is offset by them.

How Important It Is to Keep Your Financial Accounts Safe

Account takeover attempts are a possibility if you leave your financial accounts unprotected. Identity theft known as “account takeover” occurs when a cybercriminal gains access to your online accounts, including banking, investing, and other financial accounts. A cybercriminal can steal your identity and use it to commit credit card theft once they have gained control of a financial account. Account takeover fraudsters can commit crimes in your name and cause long-term consequences including debt, bankruptcy, and bad credit. You must secure your financial accounts to avoid account takeovers, which can lead to financial and identity fraud.

How to secure your financial accounts.

To protect yourself and stop fraudsters from obtaining your personal financial information, do the following.

Be careful what you click.

With phishing becoming increasingly sophisticated, the best approach to protect yourself from dangerous links is to avoid clicking on them. Even if you are certain that the link in question is legitimate, the only way to be certain that you are completely safe is not to click. Instead of clicking, responding, or downloading an attachment, go directly to your financial firm’s website or app and confirm they received the information.

Employ Secure Passwords.

Use a unique password for every account you have, don’t keep your passwords on your computer, don’t share them with anybody, and change them frequently. Use a password manager, which is an app that secures internet accounts by generating and storing unique, strong passwords for every account, to organize and safeguard your numerous passwords. Popular mobile devices and storage companies offer password managers.

Turn on two-factor verification.

One important safeguard to drastically lower the possibility that a cybercriminal will be able to access a client account is multi-factor authentication (MFA). MFA uses two or more distinct types of factors, such as a password and a code given by text message, or a physical identifier, like a fingerprint, voice, or face recognition, as opposed to single-factor authentication (e.g., a password). You will have extra security if you enable MFA if your account password is taken.

Preserve the security of your computer.

If you do online financial transactions, security software packages with anti-virus, anti-spam, and spyware detection tools are essential. Make sure your computer is running the most recent security software and set it up to update automatically. Install security updates as soon as you receive a notification for any device. Visit the websites of the companies who make your computer hardware and software to find advice on how to increase system security.

Use and safeguard your device.

Try to avoid accessing your financial accounts on non-your devices or public computers. Passwords and PINs may be captured by software on public computers, making them accessible to unauthorized users. Make careful to remove your “Temporary Internet Files,” “Cache,” and “History” after logging out of your account if you use a different computer. Additionally, make sure that you protect your financial apps as well as your mobile devices by using biometrics, passphrases, or strong passwords.

Use caution when using Wi-Fi.

To facilitate user access and usage, many public hotspots—such as the wireless networks found in hotels, restaurants, and airports—lower their security settings. This raises the risk that your information could be intercepted as well. To trick gullible internet users, some hackers even make up their public networks with recognizable names. Slow connections or networks that do not request that you accept their terms of service are warning signs to be aware of. If using a wired connection to access your financial accounts is not an option, try to weigh the security risks associated with using Wi-Fi. Hold off until you have access to a secure network. Additionally, when utilizing Wi-Fi at home, make sure your network is protected by a strong password and the best encryption available.

Examine every email you’ve received from your financial institutions.

It is important to emphasize this. As soon as your monthly account statements and account activities are available, review them. Make sure you are receiving statements regularly and that your financial institution has your up-to-date contact information. Get in touch with your banking institution right once if you discover an error or unapproved activity in your account.

Cut Down on Digital Traces

Digital data that may be tracked and used to identify an individual’s specific online activities is known as a digital footprint. Information like your browsing history, cookies from your browser, posts on social media, past purchases, and credit card details might all fall under this category. Cybercriminals utilize this data to create a profile of you based on your personal information and online activities.

Reducing your digital footprint can aid in thwarting cyberattacks. Limiting the content you share online and making your accounts private will prevent hackers from accessing private information about you. Any dormant accounts should be deleted, particularly those that are connected to your financial data. Never divulge any financial information online unless a secure, encrypted channel has been used.

Additionally, to keep your credit and debit cards safe from theft, attempt to minimize how often you use them online. Use these payment options sparingly and only on reliable websites. Avoid saving them to your online profiles because your financial information may be compromised if a website is hacked. When feasible, try to erase the stored credit and debit cards from websites, especially if they are used just once.

Activate Financial Alerts

You ought to keep a careful eye on all of your online accounts’ financial transactions. Check your financial statements to be sure there are no unusual or questionable transactions and that your transaction history is accurate. Enabling financial notifications that will notify you of any of the following will help simplify this task:

Balances in your financial accounts, either high or low
Fresh transactions using credit and debit cards
Recently connected external accounts
unsuccessful tries to log in
Changing passwords
Updates to personal data

These notifications will assist in alerting you to any attempts or successful compromises of your financial accounts. You should change your login information right away by getting in touch with your bank or credit union if you receive any notifications about questionable activity on one of your accounts.

How They Launch An Attack

Banks spend a significant sum of money protecting their networks, which makes it very difficult for hackers to breach them. Because of this, hackers choose to attack you and your accounts. It’s far simpler to hack you than a bank because they know you don’t have a security team of your own. The two most typical ways they will try to rob you of your money are as follows:

Passwords

Every one of your bank accounts has a password to secure it. Any one of those passwords could be cracked by a cybercriminal, who could then use it to log in as you and move your money to bank accounts under their control. They will attempt to obtain your password in a number of methods. Malware infection of your computer is one popular technique. Once they have access to your computer, they can take advantage of your username and password whenever you visit the website of your bank. Pretending to be your bank in phishing emails is another popular technique. Though you are actually logging onto a phony website controlled by the crooks, you mistakenly believe you are accessing the website of your bank when you click on the email link. By doing this, they can obtain your login and password once more, which they can use to log in as you.

Querying

Cybercriminals only need to request your password or the money to be transferred to them. Usually, these kinds of social engineering attempts begin by calling you. Cybercriminals are aware that it is far simpler for them to exploit emotion to trick you into making a mistake once they have you talking. This is the reason you are starting to see an increase in phishing emails, voicemails, and pop-ups on your browser that create a false sense of urgency by informing you that you need to call a phone number to fix a problem or to seize a fantastic chance before it passes. The thieves put you under a lot of pressure to grant them access to your accounts or transfer your money to other accounts after you contact the number. For instance, they might identify themselves as representatives of the government or tech support and tell you that your computer is infected and that you will lose all of your money if you don’t take immediate action.

Conclusion

To guard against credit card fraud and identity theft, you must secure your bank accounts. The greatest method to safeguard your bank accounts is to use a password manager, which enables you to safely keep your MFA codes, login credentials, and other information. A financial account’s objective is to monitor shifts in the ownership of foreign assets.

Cybercriminals are mostly interested in your financial accounts. They will stop at nothing to take your money. Financial accounts include retirement plans, investments, checking and savings accounts, and online payment accounts such as PayPal. Fortunately, you can defend yourself using advice from the SANS Institute by following a few basic, easy procedures.