Whilst online banking has been widely adopted by many users throughout the world as a quick, efficient, and above all safe way of managing your finances, many users are reluctant to use online personal finance software as they are unsure of the security implications of managing their bank account from a third party website.

One of the major causes of worry for potential users of online personal finance tools is that they believe they are opening up their bank details to the internet, where they fall victim to hackers or identity thieves. What they don't realise is that most online personal finance tools will not store your bank account details. All personal data is stored by your bank, and fed through a financial aggregator system. An example of a financial aggregator is Yodlee, whose clients include such massive names as the Bank of America, Paypal, and Fort Knox, the US gold reserve.

The data stored by the personal finance tool has details of your transactions, with no personal data attached. This means that even in the unlikely event that the security of the site was compromised and someone achieved access to the database, all they would find would be details of a series of bank transactions, with no record of the individual or bank account that made them.

The best systems combine personal data and transactional data only on the end user's computer - not all of them do that. Make sure you are using a supplier that does!

It's also not possible to make any changes to your bank account through your personal finance software. The tool is entirely read-only and will simply provide details of your bank transactions. The only place you can actually move money or change any bank account details is through the secure website of the bank themselves.

Nonetheless, a good personal finance software tool will also use tools like secure HTTPS and multi-factor authentication to ensure security and be compliant with the ISO 27001 standards and best practises.

Whilst traditionally banks have steered their customers away from any such tools, many banks are making changes to their terms and conditions and their advice and guidelines, to take into account the use of secure personal finance software tools. After all, it's in their best interest to make sure you manage your money as best you can.