As e-commerce grows in popularity and almost every bank provides some form of online services, more and more small business owners are turning to the Internet for their money management solutions. You can do just about anything online, from investing and trading, to paying your bills and applying for a business loan. While the ease and convenience of banking online may appeal to you, sending financial data over the Internet poses certain security risks. You need to be aware of these risks, and do your part to help make every online transaction a secure one.

Know What's at Risk
When you send information or funds from your computer over the Internet, there are several security breaches that can take place. Hackers can snatch the information in transit and manipulate it, sell it, or combine it with other facts about you to make it more useful. Also, you may have secured and protected your computer at work, but what about financial transactions made from your home computer?

Thieves can steal any of the following:

• Identity. Thieves build or obtain a complete profile of you and your small business including your name, address, tax ID, and telephone number. Then they apply for loans using your name to open lines of credit or wireless phone accounts -- often ruining your credit history in the process. According to the Federal Trade Commission, the number of U.S. consumers that complained about some sort of identity theft nearly doubled in 2002.

• Password. If a hacker obtains the password to your company's electronic banking account, he or she may suddenly have access to all of your business' financial records and sensitive information under that login.

• Credit card number. Numbers can be stolen during transmission on an insecure connection.

Employ Industrial Strength Protection
There are many ways both you and your financial institution can protect your accounts and your identity against fraudulent abuse. If you are working with a reputable bank, it should have a battery of defenses to keep your information private and your money safe.

• Encryption. This method of scrambling information varies in strength, but the industry standard for banks is 128-bit encryption. No one has been able to crack this level of encoding yet.

• Secure Socket Layer (SSL). The SSL allows both computers to verify that they are who they say they are, and to establish an encrypted connection between them. Using an SSL allows you to make sure you are sending sensitive information, such as a credit card number, to the proper site, and not to a hacker pretending to be that site.

• Firewalls. A filter for online traffic flowing into the bank’s Web site, their is a list of criteria that one must meet in order to be allowed through the firewall. It can block out certain users, and restrict users to visit certain areas of the Web site.

• Password policies. Ask the financial institution about its password policies. For example, does it lock you out after so many unsuccessful attempts, or does it allow unlimited guesses? Ideally, an institution should lock a user out after about three wrong passwords and require a password reset question other than your mother's maiden name, which is easily obtainable by a thief. Since passwords are one of the easiest ways in for a hacker, it is important to be sure your bank guards that password.

Take Control
While your bank may be doing a solid job of protecting your online transactions, you can bolster security on your end as well. These steps are relatively easy and can definitely make your investments, transfers, and other online transactions more secure:

• Use an encrypted browser. Make sure your browser supports 128-bit encryption. This will allow your bank's security efforts to work the best for you. The newest versions of both Netscape® Navigator and Microsoft® Internet Explorer feature 128-bit, or "strong" encryption, so if you're not using a recent version it's time to upgrade.

• Use a firewall. Firewalls make an excellent addition to your small business security for more than just banking. Firewalls provide a barrier for information flowing into and out of your network. The firewall examines the information and compares it to a list of criteria you determine. If the information satisfies the criteria, it’s allowed through. If it doesn’t, it’s blocked.

• Check for certification. A digital certificate is a confirmation of site ownership. Checking the certificate reassures you that you are sending your sensitive data to the right site, and not to someone disguised as your bank. You can check for certification using your browser's "view certificate" menu option.

• Choose a good password. One of the easiest steps you can take to boost your security is to create a difficult password, memorize it, and change it often. Hackers can use easily available software that systematically runs through combinations of dictionary words and numbers, searching for a match. Many people use their birth date or name of their child or pet as their passwords, but the most difficult to crack is an alphanumeric combination that is at least six characters and includes punctuation.

Online banks are springing up all over the Internet, and many of them may be an excellent choice for you to do your small business banking. The Web can save you time, money, and travel, so use it well, but also make sure you use it wisely. If you choose a financial institution with safety in mind, and add your own precautions, you can conduct trustworthy transactions.