Online Personal Finance Apps: Safer Than Desktop Software?

An online personal finance software app stores your financial data on developer's or provider's servers. Since this data isn't on your hard drive, if your computer gets hacked, your financial data stays safe.

Before you start using an online financial app, read the details regarding security measures provided. Here's what you should find:

• The application provides the highest level of data security, in line with security provided by financial institutions.

• Your data is encrypted, so no one can read it or use it.

• Reliable online financial apps provide a secure firewall to filter network traffic and stop malicious attacks over the Internet.

Too many home computer users don't bother with firewall, antivirus and anti-spyware software and if they do, the software is often not set up for optimum protection. Broadband connections often don't have properly secured routers. Both of these practices leave you wide open to someone hacking into your computer and getting access to your data. This is not an issue when you use an online financial app from a quality provider.

Forget about botched software installations, storing install disks, and forget about ever having to reinstall software that becomes corrupted and stops working. Online money management apps run over the Internet and are brought to you through your favorite browser such as Firefox or Internet Explorer, so you never need to be concerned about software installations going wrong.

Because online personal finance apps do not reside on your computer's hard drive like desktop software, you never need to wait for an update to download or install. Online apps update behind the scenes and you'll never even notice minor bug fixes (unless, of course, the fix remedies an issue you've had with the app). With online financial apps, you're always running the most up-to-date technology.

Your online app provider will probably email you or use an internal communication method - like a blog or discussion forum - to inform you about updates that involve big changes to the user interface, reporting, transaction downloads, etc.

Hard disks can and do crash, often causing irretrievable data loss. A good automated back up plan that is frequently tested should be in place for every home computer user, but in reality, most people procrastinate about backing up.

Data used with online financial software apps is backed up often on file servers without the online software app user having to think about it. Ideally, a fault-tolerance system should be in place and provided so you can use the online app even if the provider has system problems.