A flood of cyber-related attacks and data breaches have raised alarm bells among investors who make use of non-traditional online investment and trading accounts.
Following a recent data breach of National Public Data (NPD), which exposed sensitive information of nearly 3 billion people, financial experts are calling upon investors and traders to take more cautious security measures to protect their online accounts.
Cybercrime has become a highly lucrative industry, costing consumers and businesses over $10.3 billion in losses, according to the FBI’s Internet Crime Report. In the last two decades, the financial sector has suffered through more than 20,000 cyberattacks, amounting to more than $12 billion in losses, according to research by the International Monetary Fund (IMF).
Cryptocurrency traders have seen a similar wave of crime rippling across the blockchain, with crypto hackers scooping up more than $3.8 billion in cryptocurrency in 2022, up from $3.3 billion in 2021.
Online investment accounts have become a target for hackers, with investors and traders paying the price for their lack of due diligence. As more financial trading moves online, investors will need to bolster their approach to digital safety in an attempt to mitigate their cybersecurity risks.
Securing Online Investment Accounts
Digital security plays a vital role in safeguarding investors’ personal and financial information. There are a few simple steps that investors can follow to improve security features surrounding their online accounts.
Verify platform security
Investors should take it upon themselves to verify platform security, including brokerage apps and trading websites. At the bare minimum, platforms should provide One-Time PIN/Password (OTP) login verification.
OTPs are automatically generated by an algorithm and are provided for a single use only. An OTP code can only be sent to a device that is directly linked to an online profile and is only requested upon entry of valid profile login details.
Investors need to verify that the platforms they use have the necessary security features such as password protection, biometric authentication, or multi-factor authentication.
Set-Up Two-Factor Authentication
Two-factor authentication (2FA) can work in combination with an OTP. A code is sent via an email or text message to an account holder following a login attempt to an account. With 2FA users have an additional layer of security added to their accounts. Keep in mind, that this type of security feature is not used as part of the primary security protocols, and users will need to activate these features.
Use strong passwords
Every year, at least three in four people are at risk of having some online account being compromised due to insufficient password protection measures. Investors should follow important password best practices including:
- Changing passwords regularly
- Using a 16-character password, or something longer
- Using a combination of letters, numbers, or symbols
- Avoid using a password twice
- Avoid using a name or last name, or combination thereof
- Using 2FA along with password protection
Create account alerts
In most instances, financial accounts will allow users to activate account alerts. These account alerts help to notify a user when there has been activity on their account. This is specifically useful for investors who may have multiple online investment accounts.
Account alerts allow users to be informed about any suspicious activity that may take place across their investments. With account alerts investors will have enough time to activate security measures should unverified activity take place on their accounts.
Review account balances regularly
Regular account reviews ensure that investors are up to date regarding recent and previous account activity. By conducting a weekly, monthly, or quarterly account review, investors will have a better overview regarding their account balances, and any investment activity.
This is similar to individuals routinely checking debit and credit card statements for any unverified account activity. Routine check-ups leave less possibility for hackers to move funds from an account or to take advantage of weak security protocols.
Install antivirus software
Investors shouldn’t underestimate the importance of antivirus software. These technologies help protect users against malicious activity, such as ransomware attacks. Antivirus software can be installed across various devices, including computers, laptops, and mobile devices.
Using antivirus software will add a layer of security to online investment accounts. More than this, newer antivirus protection software is designed to adapt to newer, more sophisticated threats. These features will ensure that investors will have continued protection, even as new threats emerge.
Install a VPN
A Virtual Private Network (VPN) can be installed on computers and mobile devices. This type of software technology helps encrypt data sent and received on a specific network while masking a person’s IP address from the public domain.
Users can make use of a VPN to access websites that are only available in location-specific countries. For instance, an investor from the United Kingdom, using a USA VPN can access U.S.-based websites, as the VPN helps to redirect the IP address through an American network.
VPNs help to mask a person’s online activity but can be used to encrypt sensitive data shared across a browser or mobile application.
Avoid using public wifi
Public wifi enables investors to trade and complete transactions from anywhere, at any given time. However, there have been multiple accounts of users having their profiles hacked after using a public wifi connection.
While this might sound like something from science fiction, hackers can infiltrate an investor’s personal device via a public wifi network. Investors should keep their security settings up to date, and where possible, make use of a mobile network connection instead.
Staying Safe
Keeping online investment accounts secure has become a full-time job. Investors need to ensure that they evaluate the security protocols of the platforms they use, and activate as many security features as possible to safeguard their investments. With adequate investment in cybersecurity, investors will have the benefit of sidestepping security gaps, staying ahead of cyber hackers, and upholding lockstep actions against malicious actors.
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