Most people don’t realize that many different methods are used in protecting one’s money. Banks protect your money mostly through multi-factor authentication, data encryption, fraud detection systems, and SOCs.

Security in banking has many different layers and methods that all come together like a jungle ecosystem. It’s interconnected, diverse and versatile, if one layer is threatened, others help it preserve stability and balance. Let’s explore more into these layers.

MFA

This is a security method most people practice every day. In 2025, Multi Factor Authentication is used not just for banking applications/websites but also for entertainment platforms and other everyday services.

MFA is a method that makes a user provide extra verification to confirm if it’s really them. This could be either by a specific numerical code one receives or a security question.  Financial Institutions require this step after a password; this is very crucial in banking security because it prevents bad actors from hijacking your account.

Data Encryption

Encrypting data is very fascinating, it’s like sending a secret code. Basically, you take readable data, and you scramble it into unreadable code. Think of a 1000-piece jigsaw puzzle, you break it apart and randomly attach it together. Even if a bad actor gets their hands on this code, they won’t have the full picture of the puzzle, making it very difficult to decode this data.

When it comes to banking security, data encryption is applied when sensitive info is involved. This could be when funds are transferred, payments are made, or balances are checked.

Fraud Detection Systems

One of the most interesting layers when it comes to protecting one’s money is financial institutions having multiple different types of fraud detection systems.

Rule-Based Detection systems are commonly used which are a set of rules established. They could be triggered if any pre-established rules are broken. For example, if there were many failed login attempts before a large transaction or a customer goes over their withdrawal limit, these rules would be triggered, and they would flag this behavior right away.

Machine Learning and AI Models are also popular for banking security. These tools help determine pattern recognition behavior, if a customer is logging in from a device that has never been used, these tools will automatically trigger it as suspicious and have them require extra verification.

Another example is these tools can recognize your purchasing pattern. If you purchase something from your hometown and a couple hours later, a purchase takes place halfway across the world. These systems will automatically trigger this suspicious behavior and flag it.

Security Operations Center (SOCs)

We talked about fraud detection systems earlier, however SOCs and detection systems go hand in hand and work quite well together. While fraud systems focus mainly on financial activity, SOCs focus on technical security.

We are protecting systems and infrastructure by monitoring the bank’s networks, endpoints as well as servers. SOCs are looking for any cyber-attacks, malware, or suspicious behavior.

Fraud systems can alert the SOCs if any suspicious activity is detected. Cybersecurity professionals will then investigate this matter and determine if the threat is a false positive or true positive.

Having a 24/7 SOC team and real humans watching your network is very beneficial for financial institutions because the internet keeps only getting larger, therefore there is more risk of bad actors looking to cause trouble and benefit from it.

Conclusion

All these tools are very important and beneficial, but real people will always be the first line of defense when it comes to protecting money, sensitive data and customers. There are some honorable mentions that were not included in this article, most importantly employee training and customer education.

These digital defenses that banking security uses in protecting our money and data are the reason why we can sleep comfortably at night. Trust is very important, when all these systems are implemented many customers will be attracted to these practices and will help support these financial institutions as well as their services.