Sending money to your loved ones across the ocean needs a few clicks or a tap on your smartphone. Digital remittance platforms have allowed users to send money to anyone within a few minutes. According to Statista, online money transfer transactions are set to reach $120.20 billion by 2022.
Total users sending money online will reach 18.6 million, and the average value of transactions per user will be $940,000 by the end of 2022. Securing massive transactional value is challenging for several financial institutions and payment gateways. One of the significant challenges is data breach detection and recovery.
For example, an IBM report indicates that it will take 197 days for any organization to find a data breach and 69 days to contain it. Meantime, the financial losses due to data breaches keep on increasing. So, it becomes vital for organizations to ensure proper security for online money transfers.
Here, we have discussed some of the best tips for secure online money transfers for your organization. Let’s first have a brief discussion of online money transfers.
State of online money transfer in 2022
The cost of cybercrime will reach up to $10 billion by 2025, growing at a rate of 15% over the next three years. So, the security of online transactions is key to avoiding financial losses. One of the critical aspects of securing your online transactions is understanding the present digital remittance technologies.
So, how do online money transfers take place?
Online transactions transfer money between two bank accounts through payment gateways and secure systems like Fedwire or SWIFT. The sender will first pay the bank upfront from their accounts. Then, the bank will send a message to the recipient with the payment instructions. SWIFT or Fedwire acts as an intermediary system that ensures security for the transaction.
Once the recipient’s bank receives all the necessary information, it initiates the deposit of funds into the recipient’s account. Therefore, it would be best to have cybersecurity measures to avoid financial loss despite having secure intermediary systems like SWIFT. This is why having a business cybersecurity checklist is key to avoiding financial fraud and providing secure online transfers.
Let’s discuss some of the tips to follow for secure online transfers!
Use encrypted passwords
Customers worldwide lost more than $56 million to identity fraud in 2020. Identity fraud is common due to a lack of proper password usage. One of the significant mistakes that many users make is not using an encrypted password. So, how to ensure that your password is not compromised?
There are two aspects to password protection that you need to keep in mind,
- Using an alphanumeric and 32-character strong password with a password generator
- Password encryptions at the storage or server
Using “password123” is no option anymore, as hackers are getting smarter daily. However, password managers are the new trend for many users who want a strong password.
But is that enough?
What if the server that stores your password is compromised?
This is why you need encryption! You need to use applications and storage services that have encryption by default. For example, if you use public cloud storage to store passwords, ensure that it has encryptions and enhanced security policies.
Manage your user authentications
As an individual user, you can opt for two-factor authentications provided by payment gateways and secure payment systems. However, you need to have data access policies and user authentication measures on an organizational level.
Take an example of an intranet network, where your employees have higher privileges to data access. However, it can result in phishing attacks based on social engineering practices used by hackers. So, you need to have enhanced network security and privilege access management.
The best way to ensure network security from external threats is to have extensive penetration tests. You need to leverage the continuous integration process for network deployments. Here it is essential to have a CI/CD strategy to ensure that your network environments are tested extensively. A secure network protects your online transactions with vendors, service providers, and salary payments.
Trustworthy recipient
Why do you need only to transfer money to a trustworthy recipient? If you make an online transfer to a merchant or person you don’t trust, it can lead to financial fraud. Even if you are too shy to share how much money you have and practice “stealth wealth,” trust is key to financial security.
This is why it is essential to transact with a trusted merchant or recipient. How do we ensure trustworthiness? The best way to ensure that your recipient is trustworthy is to use asymmetric encryption for your online transactions. You need to leverage an advanced financial app with encryption-based security as an individual user.
Secure your emails
There are two layers of verifications when you transfer money online using a two-factor authentication approach. One layer is your username and password, while the other is a passcode sent to your device. This passcode is either transmitted through an SMS or email.
So, securing your emails become essential. Another critical aspect is transaction details. Organizations share key transactional details and payment information with vendors through emails. This is why you need to secure email communications.
Some applications help in monitoring emails and secure data within such messages from hackers. Take an example of apps like Mozilla Thunderbird. Such applications can help you secure email communications through tracking, monitoring, and securing the data exchange. Of course, the best part of using such applications is the password management feature which comes by default.
Conclusion
Lastly, you need a secure device to execute online money transfers. It should be secure whether you execute the transaction from a smartphone or personal computer. Even the network within which your transactions occur needs to be secure. Using a private network, use encryption-based security to protect data. Further, you can also use Hardware Security Module(HSM) to secure passwords and sensitive information for online money transfers.