Is mobile banking safe? Are we making ourselves vulnerable to cyberattacks while using mobile banking apps? Achieving mobile banking security is all about understanding what may compromise your security and what measures you can take to protect your finances.
We are using our mobile devices for more and more sensitive interactions nowadays. For example, we use our mobile banking applications to process deposits, oversee our transactions or transfer money between our accounts. In fact, these devices offer us the convenience to perform countless tasks. But how secure are mobile banking apps?
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Mobile banking explained
Mobile technology revolutionises the global banking and payment industry. It offers new opportunities for banks to extend added convenience to their existing customers. In the most basic sense, mobile banking is a system that enables customers of a financial institution to conduct financial transactions through the use of a mobile device. Unlike internet banking, it uses an app, provided by the lending company.
Customers are increasingly using mobile banking apps, and for the majority of them, this is the most used way of communication with their banks. The wealth of information stored on mobile devices provides a valuable target for cybercriminals. Given that, high-quality mobile banking services greatly impact trust towards the bank and influences bank reputation.
TOP 4 advantages of mobile banking to customers
Today, mobile banking apps do more than conduct a financial transaction, that these apps can even notify you when you spend more than you have in your account or let you control your monthly spending. Apart from these, the following are some of the greatest benefits of using mobile banking applications:
- Extra layer of protection. Mobile banking apps are designed in a way that requires SMS verification upon different scenarios like payment confirmation. In case you want to conduct a transaction, SMS code will be sent to your primary phone number that your bank has on file. As this single process greatly enhances security and identity verification, mobile banking turns out to be more secure than online or traditional banking.
- 24/7 availability. Usually, you have all the services you need to access your account 24 hours a day, 7 days a week, from the comfort of your home or from your mobile device while you are on the move. Your mobile app allows you to view your accounts online, transfer funds, access documents or tax statements, pay bills, make person-to-person payments, and more.
- Fraud reduction. Customers increasingly migrate to their preferred banking channel, and cyber criminals progressively come up with new ways to target banking apps and users. That said, banking institutions are developing and adapting numerous fraud protection layers to protect you against fraud and make you enjoy your mobile banking.
- Environmentally-friendly way of banking. We did not want to complete this list without adding the fact that mobile banking is an environmentally-friendly way of banking. It eliminates the use of paper like the brick and mortar bank branches. Because technology has replaced paper with digital, each transaction now is electronically controlled. Furthermore, having access to paperless statements speeds up the overall transaction process.
How secure are mobile banking apps?
Mobile security comprises several challenges of web security such as rapid development and continuous network connectivity, coupled with the threats common to more traditional applications like local encryption and malware. Mobile banking apps can be targeted from different surfaces, which we cover below.
- Man-in-the-Mobile (also known as MitMo attacks). This attack enables malevolent users to leverage malware placed on mobile devices to bypass password verification systems that send codes via SMS text messages to users’ mobile devices for identity verification. In that way, intruders can access or manipulate mobile functionality including getting access to victim’s bank account. Because one-time passwords are easily defeated by this attack, the effective solution is known to be the offline and time-generated passwords.
- Clickjacking. Clickjacking is a malicious attack where the attacker hijacks a UI component on a website. Technically, an invisible iframe (a frame within a frame) is placed above a clickable element on the page and instead of doing the action that was planned, the attacker’s iframe is in function instead. There are different variations of the clickjacking attack, three of which are likejacking, cropping and cursorjacking. Apart from stealing bank account information and social security numbers, clickjacking can also install different apps on a device without the user’s knowledge.
- Phishing. Phishing is a type of social engineering attack often utilised via emails to steal login credentials and financial information. Banking institutions have email filtering in place, and these products do a decent job of keeping phishing and malicious emails away from users. However they are far from perfect, simply because the phishing landscape is evolving tremendously. Yet, be informed that bank websites always make use of “https” on their websites and if you do not see the “https” prefix before the site’s URL, it means that the site is not actually secure.
The growing pool of mobile devices has become an attractive target for cybercriminals. Your mobile phone can be attacked and infected with worms or other viruses, which can compromise your security and privacy. Phone or sms-based attacks can result in theft of sensitive information, so remain informed.
- SMishing. SMishing (also known as SMS phishing) sends a text message to a user’s phone in an attempt to get them to reveal personal information. This attack is a growing and serious concern for all banking unions. The most common type of smishing attack is that a person gets a text message that directs them to call a number to confirm account information. In smishing attacks, success rates are higher compared to a traditional phishing attack because a user considers that the communication is legit.
- NFC attacks. NFC that stands for Near Field Communication is a short-range contactless communication standard. Today, NFC technology is widely used in a number of applications including physical access control and cashless payment. But, how secure NFC is? There are several potential threats to NFC which you should be aware of. The first threat is eavesdropping which happens when an intruder deletes or modifies data that is exchanged between 2 devices. Another threat is a relay attack which refers to the extraction of data, utilising a bridge between a NFC or mobile payment system and the PoS or terminal in real time.
The influx of new financial applications released every year has increased the volume of cyber security threats against mobile banking apps. Given that, incorporating mobile app security into the overall security strategy must be of topmost importance for financial institutions.
- Insecure data storage. According to a report published by Digital.ai titled “In plain sight: The vulnerability epidemic in financial mobile apps“, 83% of financial institutions apps stored data insecurely. Some examples of the errors that are usually made while securing data storage include improperly storing certificates and passwords, weak algorithm choices, not including the necessary maintenance precautions, and many more.
- Weak encryption. One of the most crucial components for banking apps is encryption. When an app has weak encryption, it may lead to sensitive data exposure, broken authentication and spoofing attacks. Once data is encrypted, only authorised parties who have a ‘key’ can read it. Banks should use advanced encryption standards to keep customers’ data out of the hands of unauthorised users.
- Improper SSL validation. SSL is a digital certificate that use encryption security for the protection of data. Their existence offers authentication to the sites, confidentiality of transactions, as well as integrity of information. Bugs in a mobile banking app’s secure socket layer (SSL) validation process may result in data security breaches.
Tips on how to make mobile banking more secure
Reading the abovementioned threat vectors can make you feel uncomfortable about your mobile banking apps. We understand that. Therefore, we provide 3 best practices with you on mobile banking security which you can follow today to keep your information safe.
Use your bank’s official mobile app when possible
Instead of using the browser to access your bank account, download your bank’s mobile app. Using mobile apps offer to enhance security over browsers. Of course, this discussion largely depends on the actual security investment that the bank has made in each application type. But, generally speaking, “bigger banks have better mobile apps and stronger security on them” Forbes says.
Do not access your bank account on public networks
Free Wi-Fi? It sounds like comfort but smells like danger. CSO Online says that “one of the biggest threats with free Wi-Fi is the ability for intruders to position themselves between you and the connection point”. It is actually simple: as Wi-Fi becomes increasingly common, you can expect Wi-Fi risks to grow over time. In case you do not have another option, but to join a public Wi-Fi, use a VPN, if possible. Furthermore, disable file sharing, look out for HTTPS in your browser bar, and do not forget to log out of accounts when finished using them.
Activate notifications for fraud alerts
Why fraud alerts are a good idea? Setting up alerts or checking whether you have already opted in must be simple on any mobile banking app. You should be able to find it in the notification settings of your app. Please be informed that some banks may offer this option free of charge for a limited period (e.g. 12 months). Basically, fraud alerts can protect you from fraud by instantly notifying you of any bogus charges and they are paramount to catching the illegitimate usage of a credit card.
You are ready to enhance your mobile banking security
One thing is for certain: no matter the precautions, mobile banking apps are not 100% secure. But this does not mean that you should use mobile banking without security in mind. Consider the best practices on mobile banking security we shared above, and give yourself additional layers of security. After all, the more you know about mobile banking security, the safer you will be, and the better you can protect your money.