Virtual private networks are often recommended to secure your digital information while using Wi-Fi at hotels, coffee shops, and in other public settings where unscrupulous individuals may attempt to spy on your activities. However, is using a VPN suitable for online banking? Should you use one on a public internet connection, or even at home? Generally, it can be a good idea — but there are downsides.
What is a VPN?
When you enable a VPN, all of your internet activity is encrypted and routed to a remote server held by the VPN service before heading to the public internet as usual. The data you get from the internet makes the same trip in reverse. Essentially, it’s like adding a pit stop to your internet data that can obscure your activity from unwanted eyes. That makes it much more difficult for observers, such as advertisers or hackers, to see what you’re doing online. “When a VPN is active, all your traffic is encrypted,” writes Max Eddy, senior security analyst at PCMag. “This means your ISP can’t see the sites you’re visiting, or the files you’re moving.”
VPNs are not foolproof, and there are ways for determined hackers — or the government — to track your online activity, but VPNs do make it a lot more difficult and can limit the scope of what they see. If you have any interest in hiding or protecting your data, especially while using an otherwise insecure connection (such as public Wi-Fi), using a VPN is a good idea.
Should you use a VPN when banking online?
You should strive to use a VPN any time you use an insecure internet connection, such as public Wi-Fi at a restaurant, airport, or coffee shop. This is especially true if you are using the internet to access or upload sensitive data such as when banking online. Public Wi-Fi can expose you to a variety of threats including network snooping, man-in-the-middle attacks, and malware distribution. A good VPN service can completely negate or at least significantly mitigate the chance that you fall prey to these sorts of attacks.
Even if banking at home on a more secure connection, a VPN can give you that extra peace of mind that your data is protected — whether you’re managing your hard-earned money, your employees’ salaries, or payments for your clients. “Although banks are already encrypting the data on their apps, by connecting through a VPN, you have an additional layer of protection and deterrence against hackers,” says Money Knacks, an online resource for financial advice.
The dark side of VPNs
Not all VPNs are created equal. In a comprehensive test of 16 popular VPNs, Consumer Reports found concerning problems with many of them as well as with the overall VPN industry. “Using a VPN requires some level of trust, because that company now gets all the information you are hiding from your ISP,” writes Yael Grauer, investigative tech reporter for Consumer Reports. “Either kind of company is in a position to make money by sharing your information with data brokers.” Consequently, it’s important that the VPN you use employs strong security measures, open-source code, public third-party audits, and privacy practices with which you are comfortable.
If you want to protect your online banking activities and other internet traffic from potential threats, using a VPN can help. However, not all VPNs are more trustworthy than your ISP, and your financial institution likely already uses encryption to protect you. When using a public internet connection, VPNs are almost certainly worth the cost. However, talk to your local institution to learn more about their security measures, which can help you decide whether it’s worth using a VPN while on a private connection.