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5 reasons digital tokens are the best option for online banking

If you do most of your banking online, you'll be familiar with the terms 'digital token' and 'physical security device' as keys or devices you use for authentication. These days, with so many of us being glued to our mobile phones all day (and night), using a digital token on your mobile banking app for your online banking needs is the best choice as you'll enjoy a more fuss-free, seamless digital experience. We'll show you 5 reasons why.

First things first: what's a digital token and what's a physical security device? A digital token or software token is a digital key that is installed on an online platform or an electronic device. Conversely, a physical security device, or a hardware token, is a physical device or dongle.

Both digital and physical security tokens are part of a 2-factor authentication process as they generate security codes that you can use to log on to online banking and authorise other banking functions. The other component of 2-factor authentication is your regular online banking username and password.

Increasingly, as technology digitises our lives, digital tokens are becoming the way to go, with more banks offering the option of replacing their physical dongles with digital ones. Here's why it's a good idea for you to make the switch too, if you haven't already done so.

1. It's safe and secure

Digital tokens are available virtually on banking apps you use on your smartphone, which means that only you have access to your accounts and banking transactions. Add the biometric authentication or 6-digit PIN you have to enter before you get your security code, and you'll stay doubly protected that way.

2. It's always up to date

Updates to your digital token take place remotely and virtually, so there's no need for you to apply for a replacement physical security device when your existing one has been phased out or runs out of battery. These virtual updates ensure that your digital token is always going to be up to date, much like the way your smartphone will automatically update to the latest operating system. This means you won't have to wait for new physical security devices to be sent to you or go through more cumbersome steps to reactivate a new dongle.

3. It's convenient and always by your side

Let's face it - most of us could leave our wallets at home these days and still survive a day out. If you're out for dinner with friends, you'll be able to pay them for your share of the meal with PayNow, as long as you've got your mobile phone with you. It's the same with your digital token. You'll enjoy a world of convenience without having to always keep track of where your physical security device is. No more worrying about misplacing it and not being able to log on to online banking until you get a physical replacement either.

4. It's ready to use in a jiffy

Remember how you had to wait for your physical security device to be sent to you and then go through quite a number of steps to get it activated? You won't face this issue with a digital one. Setting up your digital token is a task that can be done in a matter of minutes. Once you've activated it with just a few taps on your banking app, it's ready for you to use. Instantly.

5. It's environmentally friendly

Physical security devices involve quite a hefty carbon footprint because of all the manufacturing, shipping and packaging involved in producing them. Their limited shelf life also creates an additional waste management problem after they run out of battery or are phased out for newer versions. You can do your part in going green by using digital tokens and taking your banking completely virtual.

Using digital tokens safely

There are plenty of benefits to switching over to digital tokens if you've got an option to, but naturally, there are some things you should be mindful of when using them. Losing your mobile phone or giving other people access to it could create potential security risks if you're a digital token user.

But it's never a bad thing to adopt good cybersecurity practices to protect yourself against digital fraud or data theft by ensuring that only you remain the sole user of your mobile phone. Keeping your password private and not registering someone else's facial or fingerprint recognition on your phone are not only ways to keep your digital token safe; they also help ensure you don't fall prey to digital scammers. Similarly, you should also not share any of the security codes generated by your digital token - they should be for your eyes only.

HSBC is also going the digital route by offering digital tokens, also known as the Digital Secure Key, for all our banking customers. Get yours today!

Don't have the HSBC Singapore app yet?