 | Newton Male
is Chairman of the Board of Prairie State Bank of Augusta, KS, with 12 branches in the Wichita area, a position he has held since 1983. He also currently serves as a Director for Western National Bank of Lenexa, KS and the First National Bank of Medicine Lodge, KS and Overland Park, KS. Previous positions held include two terms as Kansas State Bank Commissioner, President of Prairie State Bank, and Assistant Examiner for FDIC. Professional and community involvement comes second nature to Newton. Currently he is on Federal Affairs Committee of the Kansas Bankers Association, Director of Augusta Progress, Inc., and a member of the Augusta Historical Society and the Augusta Chamber of Commerce. In the past he has been very active with the Wichita Area Girl Scouts, Augusta School Board, Mayor of Augusta, Kansas House of Representatives, various positions with the Kansas Bankers Association, American Bankers Association, Butler County Community College Endowment Association, as well as Director positions with several other area banks. Newton has also done extensive work in Russia teaching Russian bankers how to deal with their banking crisis. This endeavor was sanctioned and performed in tandem with the Financial Services Volunteer Corps of New York and the US Agency for International Development. Newton can be contacted at the Prairie State Bank, 512 State Street, Augusta, KS 67010, by phone at (316) 775-5434, by fax at (316) 775-1790, or by e-mail at nmale@prairiestatebank.co |
Banking & Finance
2003-05-01 14:10:00
Just how secure is on-line banking?
: In your answer to a question about On-Line Banking in a past issue of the Q and A Times, you mentioned that banking on-line is secure. We have all read how a hacker can figure out passwords and get access to accounts? Is that true? How often does it happen? What protection or guarantee does a bank provide against this kind of loss?
Newton Male
Question: In your answer to a question about On-Line Banking in a past issue of the Q and A Times, you mentioned that banking on-line is secure. We have all read how a hacker can figure out passwords and get access to accounts? Is that true? How often does it happen? What protection or guarantee does a bank provide against this kind of loss?Answer: Banks have firewalls, but it has been proven that people who really want that information are professional criminals and can get through a firewall, passwords and things of that sort. It is true that hackers could potentially figure out passwords and access accounts, especially if the bank customer is careless. There is no guarantee that they cannot. It is important that financial institutions minimize to what hackers might have access, but the possibility of this happening is very rare. There are more beneficial and easier targets than a financial institution. Defrauding a federally insured bank carries stiff penalties. The following steps are usually taken by prudent financial institutions to prevent and detect hackers. The security of on-line banking is based on these five important points: 1. A firewall is a hardware box that has a connection to the internet and the inside system. It uses rules and filters (tests) to monitor a system's inbound and outbound traffic. By using the rules and filters, a monitoring system is able to detect a hacker's attempt to penetrate the system. Most internet banking providers use multiple firewalls. Financial institutions normally use a third-party provider, such as Digital Insight, to handle their internet banking. This helps prevent a hacker from infiltrating the bank's main frame system. 2. The hardware firewall also provides the encryption of the data being transmitted from the remote user back to the host. An encryption is a code by which data is scrambled, and thus, is unrecognizable to an remote user. The data is then unscrambled, or decrypted, when it reaches the host. Internet banking providers have encryption keys that are kept secret. Each time a connection is made to the host, a new key is issued to the remote user. This allows only one remote user to use the encryption key at any given time. In other words, encryption makes the jewelry box indistinguishable from the cereal box. If a person cannot keep the thieves out of the house, at least prevent them from finding the jewelry. 3. A password is probably the easiest way for a hacker to gain access to an account. The failure to change passwords often enough and not keeping passwords confidential are the main problems with unauthorized account access. Passwords should not be personally associated with the bank customer. Pet names, birthdays, addresses, telephone numbers, etc., should be avoided. A password should be a combination of random numbers and letters. Protection of the passwords is the host's best defense against hackers. 4. Most on-line bank providers conduct a quarterly intrusion detection test. This test can be conducted by a third party multi-vendor at any time without notice. This is a test of the on-line bank provider's hardware firewall and monitoring systems. The results are given to the on-line banking company for review and to tighten security if necessary. A variety of vendors are used because each uses a different technique for attempting intrusion. 5. Financial institutions carry insurance covering any losses due to intrusion of their systems. The amount of this insurance may vary from institution to institution. On-line banking is secure. However, this does not relieve the bank customer of responsibility to reconcile and monitor accounts.
