Online Banking Security: Keep Your Finances Safe

About 9 min read

Online banking lets you handle transfers, check balances, and manage fixed deposits from home without visiting a branch - an indispensable part of modern life. Yet because it is directly linked to financial assets, it is also the most attractive target for cybercriminals. According to Japan's National Police Agency, unauthorized transfer losses related to internet banking reached approximately 2.44 billion yen in the first half of 2024, remaining at a high level following the roughly 8.73 billion yen recorded for the full year of 2023 (about 5.7 times the previous year). Japan's Financial Services Agency continued to issue warnings in 2024, citing increasingly sophisticated phishing scams as the primary driver of growing losses. This article organizes the risks lurking in online banking and explains comprehensive measures for using it safely.

What Should You Actually Do? - Measures by Level

Online banking security measures are easier to organize when you think of them in the following three tiers.

• Beginner (minimum): Generate a password of 20+ characters with passtsuku.com, enable two-step verification in your banking app, and access the site only via bookmarks
• Intermediate (recommended): Set an authenticator app (Google Authenticator, etc.) as your second factor, minimize transfer limits, and enable transaction notifications
• Advanced (ideal): Prepare a dedicated banking device, use a FIDO2 security key for authentication, and take advantage of pre-registered transfer destination features

Risks Surrounding Online Banking

The surge in unauthorized transfer losses is the result of increasingly sophisticated attack methods combined with user complacency. According to Japan's Financial Services Agency, the number of unauthorized transfer incidents reached 2,322 in the first half of 2023 alone, setting a new record. The same trend continued in 2024, with no sign of attack sophistication slowing down. Understanding the main tactics used by attackers and taking countermeasures for each is essential. Beyond phishing and malware, credential stuffing - reusing leaked credentials from other services - and session hijacking that takes over authenticated sessions are also serious threats.

Phishing Scams

This tactic lures victims to fake sites that closely resemble a bank's official site, tricking them into entering login IDs, passwords, and one-time passwords. Emails and SMS messages are sent with urgent pretexts such as "Re-authentication is required for security enhancement" or "Your account will be frozen." Phishingtactics grow more sophisticated every year. Since legitimate banks never ask you to enter passwords via email, never click links - always access your bank through bookmarks or the official app. In recent years, "homograph attacks" using URLs that closely resemble legitimate domains have also increased, making visual identification alone difficult. According to the Anti-Phishing Council of Japan, phishing reports reached approximately 1.71 million in 2024, up from about 1.19 million the previous year. Roughly 40% impersonated financial institutions.

Malware Infection

When malware infects a PC or smartphone, it can record keyboard input (keylogger), capture screenshots, and tamper with communications. "MITB (Man-in-the-Browser) attacks," which replace the destination account with the attacker's account even while you are accessing the legitimate banking site, are particularly difficult to detect. Since MITB attacks exploit vulnerabilities in browser extensions and plugins, removing unnecessary extensions and keeping your browser up to date are effective countermeasures. Reviewing keylogger threats and defenses will also deepen your understanding of protecting input data.

SIM Swap Fraud

In this tactic, attackers impersonate a mobile carrier and transfer the victim's phone number to a different SIM card. They intercept one-time passwords delivered via SMS and use them for unauthorized transfers. In recent years, cases have been reported in Japan as well, highlighting the need for multi-layered measures that do not rely solely on SMS authentication. A common misconception is that "SMS authentication is safe enough," but given the existence of SIM swap fraud, it is important to recognize that SMS authentication is the most vulnerable method among multi-factor authentication options.

Why a Dedicated Device Is Recommended

If possible, we recommend preparing a device dedicated to online banking. Devices used for everyday web browsing and app installation carry a higher risk of malware infection. Setting up a dedicated device provides the following benefits.

• Lower malware infection risk due to the absence of unnecessary apps and browser extensions
• Only the banking app and OS updates need to be managed, making security maintenance easy
• The risk of accidentally accessing phishing sites is reduced
• No opportunity for family members or others to operate the device, preventing unintended actions

If preparing a dedicated device is difficult, at least ensure the following when using banking services: always keep your OS and browser up to date, avoid untrusted sites and apps, and never perform banking on public Wi-Fi.

For choosing a dedicated banking device,dedicated banking tablets (Amazon) can also be helpful.

Online Banking Security Settings

Make the most of the security features provided by your bank.

• Enable one-time passwords (OTP) - hardware tokens or authenticator apps recommended
• Set transfer limits to the minimum necessary to contain potential losses
• Configure login and transaction notifications via email or app
• If available, enable the feature to restrict logins during unused hours
• Use the pre-registered transfer destination feature to restrict transfers to unregistered accounts

For one-time passwords in particular, using an authenticator app (Google Authenticator, Microsoft Authenticator, etc.) or a hardware token rather than SMS provides greater resistance to SIM swap fraud. Authenticator apps generate time-based codes on the device itself, eliminating the risk of interception over communication channels.

To deepen your knowledge of countermeasures against unauthorized transfers,practical anti-phishing guides (Amazon) can be helpful.

Generate a 20+ Character Financial Password with passtsuku.com

Passwords for financial services require higher strength than those for any other service. With passtsuku.com, you can easily generate strong passwords based on cryptographically secure random numbers. The recommended settings for financial services are as follows.

• Length: 20+ characters (a length close to the maximum allowed by your bank is recommended)
• Enable all four character types: uppercase, lowercase, digits, and symbols
• Aim for 100+ bits of entropy on the passtsuku.com strength meter
• Generate a different password for each bank and never reuse them

Some banks may restrict the types of symbols that can be used. In that case, turn off symbols and increase the length to 24+ characters instead to ensure sufficient entropy. If the passtsuku.com strength meter shows "Strong" or above, the password is strong enough for financial services.

Passwords generated by passtsuku.com are processed entirely within the browser and are never transmitted externally over the network. By saving generated passwords in a password manager and eliminating the need for manual entry, you can also reduce the risk of shoulder surfing (someone peeking from behind).

Online Banking Security Self-Check

Use the following checklist to verify whether your current banking environment is sufficiently secure.

• Is your banking password a random string of 16+ characters?
• Are you not reusing passwords across other services?
• Have you enabled one-time passwords (authenticator app or hardware token)?
• Have you set transfer limits to the minimum necessary?
• Have you enabled login and transaction notifications?
• Are the OS and browser on your banking device up to date?
• Are you avoiding banking on public Wi-Fi?

Detecting Unauthorized Use Early

No matter how many measures you take, risk can never be reduced to zero. Develop habits to detect unauthorized use early and minimize damage.

• Review transaction statements at least once a week and check for unfamiliar transactions
• Always check notification emails and push notifications from your bank
• If you discover a suspicious transaction, contact your bank's call center immediately
• Periodically regenerate passwords with passtsuku.com and update your credentials

Under an agreement by the Japanese Bankers Association, if an individual suffers unauthorized transfer losses through internet banking and is not at fault, the bank will in principle provide compensation. However, if the user is found to have significant negligence - such as reusing passwords or voluntarily entering credentials on phishing sites - compensation may be reduced or denied. Recognize that everyday precautions are also a prerequisite for compensation.

Online banking safety is achieved through a combination of strong passwords, multi-factor authentication, device protection, and routine monitoring. Build multi-layered security measures on the foundation of high-strength passwords generated by passtsuku.com. Be sure to also review the importance of two-factor authentication and how to identify and defend against phishing to strengthen your overall defenses.

What You Can Do Right Now

1. Generate a 20+ character password with passtsuku.com and change your main bank's online banking password
2. Switch your one-time password method from SMS to an authenticator app (Google Authenticator, etc.)
3. Lower your transfer limit to the maximum amount you routinely need, reducing potential losses from unauthorized transfers
4. Configure login and transaction notifications to be received via both email and app
5. Bookmark your bank's official site and make it a habit to never access it from links in emails or SMS

Frequently Asked Questions

Is SMS authentication alone insufficient for online banking?

Yes. SIM swap fraud can intercept SMS codes. Switch to an authenticator app (Google Authenticator, etc.) or hardware token for stronger protection.

How long should an online banking password be?

20+ characters is recommended. Use the maximum length your bank allows with all four character types. Aim for 100+ bits of entropy on passtsuku.com.

Will the bank compensate me if I suffer unauthorized transfers?

Under the Japanese Bankers Association agreement, banks generally compensate if the user is not at fault. However, significant negligence like password reuse or entering credentials on phishing sites may reduce or void compensation.