Question:

I am interested to shift to digital banking as I have seen my colleagues drastically cut down time spent in doing daily banking transactions. From queueing at bank branches for forty minutes just to deposit money to transferring funds online in less than four, online banking made me realize that I can spend the remaining thirty six minutes doing something productive.

However, I am still quite unsure of using online banking because of perceived security issues and I wanted to secure my money. How can I safely use online banking?

Answer:

First of all, it is good that you are cautious. It means that you are aware of some downsides of online banking. I am also well aware that security risk and complexity remain to be a concern for most customers who are not keen on digital banking. These legitimate concerns, however, are not drawbacks, but rather metrics to weed out unreliable digital platforms. Thus, don’t let the downsides override all the good things that online banking can offer.

To build you a scenario, imagine that a bank branch is being robbed; before robbers can access the vault, they have to go through a layer of security measures. The level of security is also the same with online banking. Before anything else can happen to your money, hackers need to go through several layers of safety measures like security firewalls among other things.

No matter how secure a bank is, bank account holders should be accountable as well, if he or she was not cautious enough. This is the same thing as when you flaunt your valuables as you walk on the streets. If you are not careful enough with your personal information, you can be a victim of phishing or skimming in no time.

To avoid this, make sure you use security measures that banks provide.

First of all, banks now have different means of user login. In the past, you only need to remember your username and password. But due to increasing sophistication of hackers, some banks have introduced multi-factor authentication which adds up to a layer of security including biometric authentication like fingerprint authentication that is common in opening your mobile banking app.

The OTP or a one-time-password is one of the security features that banks use today you should appreciate. It is a single-use unique 6-digit code that is sent to the registered mobile numbers of customers as an added protection for online transactions. BDO, BPI and other banks offer this same feature, at no cost. Security Bank, which is the “Bank of Year of 2018” according to the Banker, is among the banks the effectively uses this feature. Websites with the logo of MasterCard SecureCode will require an OTP for online transactions. OTPs are secure because it cannot be reused and expires immediately. Security Bank, for example, has an OTP that’s lasts for three minutes.

OTPs may take up some time but it is an extra layer of security that you shouldn’t miss.

Once you are online banking, you must always make sure to log out of your account especially if you are accessing your account in public spaces. Some banking apps, however, automatically logs out accounts that are idle for a few minutes, regardless, make it a practice to logout your session.

Going back to the Banker, congratulations to Security Bank for winning another award! It is worth to know that it is the “Oscars of the banking industry.” I have read in the papers that it is the only bank that won the award four times in the past decade – a rising mid-size contender among giants. Its Japanese partner as well, MUFG Bank, has won the title same title as Japan’s Bank of the Year, for the fourth consecutive time. But why am I a bit off topic? The same award giving body recognized DBS Bank in Singapore as the Global Bank of the Year. DBS has been driving digitalization in Singapore. These are some banks that you should look at when it comes to digital banking innovation and security. However, most banks should now be able to communicate safe online banking through different channels.

The features that I have mentioned above are just some of the added layers of security of banks, besides regular customer advisories on cybersecurity and system maintenance and upgrade.

It is important to be aware of the extra layers of security in online banking, especially now that the BSP is pushing for the National Retail Payments System or NRPS and increase e-payments by 20% in 2020.

In the end, everything has risks, just the same with banking and entrusting your money.

Just remember that banks have been continously evolving and adapting to technological change.

Happy online banking!

QUESTION: Because of emergency and other unforeseen expenses, I have racked up credit card debt. I hate the feeling of having debt. It scares me that I may never be able to pay them down, and the interest rates are discouraging. I would love to get some tips from you on how I can pay down my debt. Thank you so much for your help. – Johnny via e-mail

Answer: Ah yes, when you have credit card debt, it can feel like there’s a heavy weight on your shoulders. You want to do a number of things, but you can’t because you’re always thinking about the debt you have. It feels hard to relax when you pay more on interest month per month. Eradicating credit card debt will take a heavy weight off your shoulders. If you’re up to neck in debt, here are 5 easy tips to get out of credit card debt:

Use the snowball method

The snowball method is a method used to tackle debt by attacking your credit card with the smallest balance first. Just as a snowball is rolled and piled together to create a bigger snowball, the snowball debt method lets you start with the smallest balance to give you the confidence to attack bigger balances in the future. Paying off the smallest balance will make it easier and faster for you to pay down debt. For those who are new to saving and budgeting, starting small (read: paying the smallest balances first) will ease you into the habit of paying debt. If you start big and pay off the biggest balance with the highest interest rate first, this can shock you and make you feel like you’re not making any progress and you might fall back into the trap of accumulating more debt.

Automate payments

“Out of sight, out of mind” right? If you set up your account, so that your credit card dues will be automatically debited from your bank account, you’ll treat the money as if you never had it at all. If you choose to pay your credit card balance manually, you may be tempted to pay the minimum balance only to give way to other expenses you prioritize. By automating your credit card payments, you’ll feel like you didn’t even have the money in the first place. Even better is that you’re paying the full balance each month, which avoids extra fees. Multiple banks, such as BDO, BPI and HSBC, offer this auto-payment service. Just log on to your online account to apply.

Track your expenses

A lot of people get into credit card debt because they treat it as free money. It’s easy to hand that plastic to the register, swipe it, then sign. Until the billing statement comes. Then, you find yourself searching every corner of your home for spare change to pay your balance. By tracking your expenses (pro tip: have a separate category for credit card expenses), you’ll see where your money is going, and you’ll realize just how much you’ve racked up in purchases using your credit card. Tracking your expenses avoids adding to the debt you already have. Multiple phone applications, such as Expense Manager, Mint and You Need a Budget, allow you to track your expenses in a comprehensive manner (e.g. by timeline, by category, current balance, etc.).

Transfer balances

Multiple banks provide this service of transferring and consolidating all your credit card debt into one bank. To get the most out of balance transfers, transfer all your balances to the bank that offers the lowest interest. This way you’ll be paying less in interest, which can save you a lot. Late fees for credit card dues start at around 3 percent a MONTH, so it’s best to avoid sky-high interest rates as much as possible. By transferring your balance from one account with a high-interest rate to the one with the lowest, just imagine how much you can save. It’s best to remember that there’s no such thing as free money and the interest rates on credit cards will make you wish you never had a credit card in the first place.

Use a part of your savings

Have an emergency fund, it’s one of the basics of personal finance. This e-fund must be used ONLY for emergencies, nothing less; however some rules can be broken. If your e-fund is well-padded, if you have a continuous flow of income, if you have a partner that has his or her own income and emergency fund, if you have investments, THEN you can use a portion of your emergency fund to make a lump sum payment. Remember that in a savings account, you only earn 0.25 percent in interest a year, humiliatingly less than the 3 percent a month you pay in credit card interest. Consider using a portion of your savings to pay your debt down faster and avoid incurring the 3-percent interest a month.

Road to financial freedom

It’s a different feeling when you don’t have to worry about debt. You don’t feel like you have a rope tied around your neck. You feel like you’re able to save and invest earlier and faster. Having zero debt maximizes your opportunity to live a life free of worries. That portion of your income you used to pay down debt? Use that money to go on a much-needed vacation that is not funded by debt. Even better, use the money to start investing, saving for a house down payment, or whatever financial goals you may have. The bottom-line is once you pay down all your credit card debt, you’re on the fast track to reach a life free of money worries.

“The rich rules over the poor, and the borrower is the slave of the lender.” – Proverbs 22:7, ESV

As the Philippine economy continue to provide more opportunities for the Filipinos, the earning capacity of our population has improved through the years. However, it is a well-known fact that increase in income does not always equate to financial empowerment and preparation if not coupled with proper financial education. Further achieving success is not just about financial empowerment but rather empowerment in the many other facets of life.

On September 29, 2018, I will once more organize an empowering conference to help attendees properly prepare for their future. The event is aptly called “Build Your Future” and this particular event is intended for the young professionals  through a practical and engaging half-day learning event.

I am so privileged to be joined by three amazing individuals who will all help the conference participants ‘build’ their future through the sharing of their expertise:

Ardy Abello on TOP PERFORMANCE: How to Become the Best Version of Yourself

Ardy Abello is one of the country’s leading motivational speaker and a John Maxwell and Strengths Finder certified trainer. He is one of the most sought after speakers and coaches on productivity, leadership and success.

Dennis Sy on BUILD A BETTER FUTURE: Doing Social Good to Build a Better Future

Dennis Sy is a a best-selling author and leading influential blogger and vlogger on manhood and life principles. He is the senior pastor of Victory Green Hills, a church which gathers 4000 attendees weekly.

Gabbie Tiongson on MOVING FORWARD: Designing Your Life Plan with Meaning

Gabbie Tiongson was student leader and a licensed teacher but has decided to focus on empowering students as a campus missionary. She believes in investing in the next generation.

The event will be from 1 to 6pm and will be held at the Samsung Hall, SM Aura, Taguig City.

Here’s why you should attend this life-changing event — the fee to this event is only P500.00 and it comes with my book Build Your Future Today worth P500.00! Slots are going fast so it is best if you sign up and pay to secure your slot because slots are running out fast!

To register, visit www.bit.ly/BYF2018