What security features should you look for in a business checking account?

All the best business checking accounts have high-level security features and FDIC insurance. However, some banks still need to make some upgrades in this area. Fraudsters and hackers work hard to find ways around banking security measures, so it’s important to find banking solutions that work even harder to help protect your business finances.

Here are the security features you should look for to keep your business checking account protected. 

1.   Data encryption

Data encryption means that your account data and transactions are encoded when business is conducted between banks and payment processors. You may be surprised to learn that newer bank accounts with online-only operations often have higher encryption standards than more traditional brick-and-mortar banks and credit unions.      

2.   Multi-factor authentication (MFA)

The ability to log in to your business checking account by entering a username and password on the home screen may seem convenient. In the modern business world, it’s a major security concern that hackers feast on. More progressive banks use different screens for each piece of data and have added multi-factor authentication layer to further secure your account access.

The most common additional factor for account login is a request for a code sent by the bank to the account holder by text or email. Mobile technology also allows for biometric authentication with a thumb print or facial recognition. Password security best practices recommend that you use multi-factor authentication, even if your bank makes it optional.      

3.   Fraud detection and prevention

Security features like data encryption and multi-factor authentication are good roadblocks to fend off identity thieves and hackers. Unfortunately, those unscrupulous individuals sometimes get through those firewalls. Your bank should be able to detect fraud immediately and step in to prevent it from happening again—the responsibility for that should lie with them.

Look for a zero-liability policy when you open a new business checking account or business credit card. Banks are insured, so they should take on the burden of any losses caused by a breach in their account security. Zero-liability policies protect the account holder and can ensure your business isn’t affected by fraudulent charges. Look for the following features:   

Account monitoring

If you’re doing business in California and a charge pops up at an appliance store across the country, that’s likely a fraudulent transaction. Banks with automated account monitoring will flag that transaction and contact you to verify its legitimacy. These flags go up any time a transaction doesn’t seem to match your regular spending habits.      

Suspicious activity alerts

You might not always be available to answer your phone when your bank’s account monitoring reveals suspicious activity. Look for banks that enhance that service with SMS text messages or emails that you’re more likely to see. Addressing and preventing fraud requires immediate action by both the bank and the account holder. Suspicious activity alerts can make that much easier.  

4.   FDIC insurance

The collapse of Silicon Valley Bank reminded business owners of the importance of FDIC insurance. The Federal Deposit Insurance Corporation was established to offer protections to bank depositors. The limit of that protection is $250,000 per depositor, per bank. Your bank must be an FDIC member for you to receive that protection.  

Businesses with more than $250,000 in deposits can do business with multiple banks or find one bank that uses a sweep network of other banks to move money that’s over the FDIC-insured limit. Sweep networks can offer FDIC insurance up into the millions, which is ideal for growing businesses.