How Do Neobanks Protect Our Money?

https://optherium.com/digital-banking/

How do Neobanks Tackle The Most Common Banking Frauds?

In 2021, more than 45 percent of total banking losses in the UK were due to payment card fraud. Over 38 percent are authorized push payments, and only 16 percent of fraud cases are caused by remote banking.

How do Neobanks Protect Payment Cards Online?

In the online space, a white label digital bank would allow its users to pay with a one-time virtual card instead of utilizing their debit card. Although this seems like a simple feature, most traditional banks don’t quite offer it yet. This preventive feature absolutely eliminates the risk of your data being stored by unwanted third-party software, a virus, or a script.

How do Neobanks Protect Your Physical Payment Cards?

It’s one thing to protect a card in the online world and an entirely different thing to protect it from theft and usage by someone else, as well as social engineering. A great example here is what Revolut does, namely tracking your physical debit card’s location. If it’s far from your phone, it will refuse to pay in any way. That, of course, is possible only if you allow that feature through the online application. In a good digital banking platform, with a few clicks, your latest payments can be reverted.

Disabling Certain Categories of Purchase

A very comfortable feature about neobanks and card spending is that some of them allow the user to modify what they can purchase and limit certain types of purchases.

Automatic Limits

There are automatic limits regarding spending per week both in terms of withdrawal, contactless payments, and online spending. You can reset these by authenticating yourself on your mobile app with either biometrics or your phone’s pin code or password pattern.

Are Your Funds Secure From Default In Neobanks?

As you may know, in case a bank goes bankrupt, your deposited funds are securely insured up to an extent. The insurance limit reaches up to $250,000 in the US, provided by the FDIC (Federal Deposit Insurance Corporation).

Hacker Attacks

According to the Ponemon Institute, more than 110 million US citizens have had some personal information exposed by hackers in the past year. Big banks like JP Morgan Chase confirm that they’re facing constant hacker attacks almost on a daily basis.

How to Protect Your Bank Account As a User

Regardless of whether you are a neobank user or your funds reside within a traditional bank, your funds can never be too safe, which in some part depends on your spending habits. For example, no matter how secure your bank is, if you are logging into your mobile banking app through publicly accessible wi-fi networks, you are exposing your data to anyone linked to that network.

Avoid Suspicious ATMs

Suspicious locations in certain areas should be avoided for multiple reasons. Not only are dim ATM locations often the place for physical theft and pose the danger of being mugged while withdrawing, but they can also be compromised with the help of third-party tools and gadgets.

Restaurants

There are multiple reports in which restaurant employees would skim cards when you are paying with a payment card, and they would steal your information. Be advised to pay with your neobank cards in a restaurant, as opposed to your brick-and-mortar issued ones.

Shady Internet Links And Social Engineering

Malicious internet links have been there since the beginning of the internet. Always pay attention to whether you know the sender of a link and whether they are not impersonating someone you know.

Final Words

There are many ways to protect your privacy, passwords, and personal information, including payment methods. But one of the most important decisions to make is which bank to trust with your savings. Most neobanks are as secure as most traditional banking institutions. They increase their security standards on a daily basis with the help of machine learning algorithms that constantly simulate hacker attacks and adapt to them.

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