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If you're like Toronto mom Jody Scotchmer, there aren't enough hours in your day. Juggling a full-time job and two children doesn't leave much time for mundane errands like going to the bank.
"Online banking has become a necessity in my life. I can't even imagine going to a bank or, frankly, putting stamps on an envelope anymore," says Scotchmer, who started banking online two years ago. "My days are full. So, when I've tucked my kids in bed, I just hop online and within minutes all my bills are done. It's a serious time-saver."
Scotchmer's not alone, according to a recent NFO CFgroup study released in January 2003. Thirty-one per cent of Canadians were registered for online banking in 2002. That's up from 24 per cent in 2001. Among Canadians with Internet access, that number jumps to 47 per cent, which is up from 40 per cent in 2001.
NFO CFgroup vice president Rhonda Grunier says Canadians are discovering the added benefits of banking online. "You can access your accounts," she says, "and just a click away you have a wealth of financial information and tools like online calculators. That makes it really appealing for people."
What can you do online?
Most institutions offer the same online banking services, including the ability to:
- Check account balances
- View and print transaction records
- Pay bills
- Transfer funds between accounts
- Update contact information
- Apply for a loan
Bill payment is a common draw. To pay bills online, you create a list of companies much like you'd set up an address book in your e-mail program. When it's time to pay a bill, you simply enter the amount and select a recipient from your list. You can even schedule bills to be paid at a later date or set up monthly payments.
Signing up to bank online
You can register on your bank's website or call and speak with an online banking expert. They'll issue a temporary PIN that allows you to access their online banking area — generally the same day. You'll use this PIN and your client card number to sign in to bank online. Once signed in, the website will direct you to a listing of your accounts.
You should change your PIN regularly. Shawn Murray, director of communications for the Canadian Bankers Association, encourages people to avoid obvious PINs. "If your wallet or card is lost with any other identification, someone could easily guess your PIN if it's a birth date or an address," he says. Murray suggests using the maximum number of characters your bank allows, and a mix of numbers and letters that someone couldn't easily guess. He also says you should never write your PIN down or share it. If you have, change it right away.
Investigate safety options
"People forget that banking is very much focused on customer service," says Murray. "Privacy and security of information are top priorities for our banks."
Murray says Canadian banks have spent about $17 billion on technological improvements in the last five years. They use 128-bit encryption, a process that scrambles your data while it's being transferred across the Internet to your bank. It's like sending your information as a top-secret code that only your bank can crack. On your end, you'll need a secure web browser. Check your bank's website for security information and minimum browser requirements. And upgrade your browser frequently to ensure you're using the latest encryption technology.
And, while Murray says the system is "very, very secure," he cautions users that the convenience of online banking does bring some risks.
He advises people to rely on the same common sense they'd use dealing with anyone. "Know whom you're dealing with," he says. "Don't give out your credit card information to just anyone online." Murray says if using a shared computer, be aware of who might be using it next. Log off and clear your cache after all online transactions so your session can't be intercepted.
Track your online transactions — offline
You should also keep offline records of your online transactions. You can do this by listing your transactions and confirmation codes in a simple Word document or with personal finance software like Money 2003. Scotchmer keeps track of her paid online bills by writing the confirmation number on the bill stubs — her home bank website also has a section that records her bill payments.
Remember to keep these offline records secure. If you're printing confirmation codes of bill payments for example, Murray suggests that you keep them in a locked cabinet with your other financial documents. If you're using Word or Microsoft Money, be sure to password protect your files.
Published March 2003
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Writer, Alyson Munroe
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