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Are wireless networks a risk to my online banking?

Last Edit: 20/05/18

With Reuters reporting that a record number (762) of UK bank branches closed in 2017, it is becoming clear that banking may switch entirely to online/phone banking. While the convenience of online banking is without question, its security is another matter entirely. While the security of bank websites does vary -- First Direct, HSBC and Barclays generally receiving favourable -- it is usually the behaviour and security of the users hardware/software that poses the greatest risk to online banking. People access the Internet and online banking websites by either a wired or wireless Internet connection, and this page will examine how risky it is to connect via a wireless Internet network/connection.

When compared to a wired connection -- ethernet cable connected between your computer and router -- using a wireless connection poses a greater risk to Internet communications security. Wireless networks/connections tend to be either through a WiFi network or a mobile/cellular network. Wifi and mobile networks use a range of security algorithms, some of which are more secure than others. Mobile communications can be eavesdropped, that has been exposed by TV shows like CBS's 60 Minutes which showed US Representative Ted Lieu's smartphone being hacked. Likewise, Wifi networks can be hacked, even when they use an encryption algorithms: Wired Equivalent Privacy (WEP) is generally considered a security algorithm that is fairly easy to hack with readily available software.

When compared, using a cellular/mobile network is probably safer than using a public Wifi network, because a mobile network is not being broadcast, and you can connect to a mobile network from different locations to minimizes the risk of the communications being continually eavesdropped; GSMK CryptoPhones are amongst the most secure. There has been great debate about which mobile networks are most secure: you would expect that the more modern the network technology is, the more secure it will be, but TheTelegraph reported in 2014 that "4G 'inherently less secure' than 3G": due to it using 100% IP signaling rather than more obscure mobile protocols (SS7). The greatest risk posed to online banking is when a public Wifi network is used, which tends to be a public Wifi hotspot that may have no encryption and can be compromised in a vast array of ways.

When setting up a Wifi wireless network, the following steps should be taken to ensure its as secure as possible:

Taking steps to secure your wireless network -- such as above -- will help to increase the security of your network, but, it will not make your network invulnerable to access. Wireless communication, by its nature, makes it more insecure, because it is far easier to intercept wireless communications than it is to intercept wired communications. And, it is not always known that a security algorithm is insecure until a major security breach has been reported and it becomes common knowledge: rarely is any system infallible.