Bank Token: Everything you Need to Know

Victor Ijomah Victor Ijomah 107 Views
11 Min Read
Image Credit: Pettycon from Pixabay

Bank token is one of the major security measures taken by Banks to keep your online transactions safe. Have you ever heard of bank scams, credit card scams and many other scams associated with financial institutions?

One has to wonder, if there’s no way to truly secure his/her account, but there actually is. Sit back and read along, i will be exposing all about this secured way of keeping your financial transactions safe.

What is a Bank Token?

Bank tokens also known as Bank Security token are physical devices that customers of Banks carry about which provides access to their online banking platform.

They help to authenticate you and your online banking profile, in the sense that they display constantly changing numerical passwords that you must have to input during logins.


This device can be in the form of smart cards or embedded in common objects such as key chains.

For extra security, a bank token can be used in addition to your normal bank login password or to replace your bank login password totally.

Features of a Bank Token

The different types of Bank token have different features, but here are the most common features you will find among them.

  • Time based: All Bank token are usually time based, which simply means that you are required to input the display numerical password within a time interval. If you fail to do this, that particular password expires and you will be required to generate a new one.
  • One time password: Bank tokens been a one time password doesn’t mean you are allowed to use it only once. What it means is that, you can use it to get access to your account for a particular login period and you don’t need to keep entering the code throughout that login period. But as soon as you log out, you must input a new one time password to gain access again.
  • Constantly changing Passwords: All Bank tokens constantly change, your one time password for a particular login is totally different from the previous login and also the next.

Advantages/Benefits of Bank tokens

  • Optimum Protection: Bank tokens gives you a maximum protection against any online thefts, hackers and fraudsters. Since you are the only one with access to your bank token.
  • Easy to use: One might think to have such sophisticated device will require any technical skill or knowledge but it’s as easy as just pressing a button and typing your pass code when it is required.
  • Portable and Flexibility: You can carry your Bank token anywhere you go and since you can carry it about, it makes it easy to protect. Bank token also allows you to perform your Online Bank transactions from anywhere in the world.

How do Bank Tokens work?


Moving over to how these bank tokens operate, you will find out it is very simple, Bank tokens provide an additional layer of security through a method called two-factor authentication, which i am very sure you must have come across.

A Bank Token simply displays a numerical password that uniquely identifies the bank user to his/her account her personal online banking platform.

But before then, you must have a personal identification number (PIN) that allows you to own this device.

When a customer tries to access his online banking account, the Bank token provided by the bank is what proves that the customer is rightful owner of such account.

When the bank user enters the Bank Token pass code along with their user ID and password, they meet the multi-factor authentication that guarantees them access to their personal banking platform.


Types of Bank Tokens

There are specifically two types of bank token.what is type bank token

  • Hard token: A Hard token token otherwise known as physical token is a hardware that displays your numerical pass code on a built-in LCD display. Users of a hard token only need to press a button or simply key in their PIN and their Pass code will be on display.
  • Soft token: Soft token also know as virtual tokens are softwares you can download to your mobile gadgets. This type of Bank token comes from the earlier type of Bank token which we have discussed before now. A soft token simply uses the software architecture to create and deliver security features which we termed numerical pass code.

Hard Token Vs Soft token

Having understood what a Bank Token is, the features, the benefits, how it works and of course the types.

We are faced with a choice to make, which should i go far? The hard token or the Soft token.

Here are some major comparisons between the two Bank tokens

  • Hard token is generally expensive compared to soft token. since soft tokens can be available in your mobile device. hence having a smartphone means having a soft token.
  • Hard token is easier to use when compared to the soft token, you only need the press of a button to display your pass code.
  • Soft token is less secured since they are also contained on the same gadget your banking application or browser may be installed. If a thief or hacker gains access to your device then you’re at a huge risk of losing your money.
  • The Hard token may have certain issues from time to time that needs repairs or upgrade, unlike the soft token that users can update their software anytime, any day.
  • Using a Hard token requires you to carry an extra piece of gadget wherever you are going. To some users, this may be a disadvantage while others may find this comfortable.

What type of Bank Token should i use?

Your type of business will play a major role on deciding what type of Bank token you should use.

You may want to consider various aspects such as price, usability and privacy.

If you opt to make use of a bank Token you will always be required to enter the pass code generated by the token in addition to your User ID and Password for every login.

For some companies that use Internet banking in one location, hard tokens might be the best choice.


For business users who can use internet banking from various terminals (office computers, laptops) at home or traveling with a mobile device.

Soft token installed on their mobile devices might be a better solution.

Why should i use a Bank token?

The major reason why you should employ the use of either a soft Bank token or a hard bank token is for security purpose.

There are many malicious programs called “malware” which are now the biggest threat to online financial transactions.

One famous malware is the “Trojan malware” this program has the ability to go unnoticed in your computer and steal sensitive information.

These malicious softwares can infect your computers from unknown email attachments or fake websites.

A soon as your computer gets infected, they begin to monitor the websites that you visit.

Their major goal is to capture online financial records or account details and send them off to the hacker or developer of the malware.

But with the use of Bank tokens, malware is defeated due to the fact that a new password is generated every login session.

Even if the malware was able to steal any login detail and passwords, they will need to input a token to gain access which only the owner has access to.

In today’s online world, a growing landscape of security threats needs to be better protected.

In conclusion, Bank token is one of the safest means to secure your online transactions.

There has been no recent knowledge of any hack via token unless the individual willingly gave out his/her token.

Even if your bank hard token is stolen, the thief still has no access since an additional pin is required to open your token.

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