Mobile Banking Security: 7 Reasons Why The Apps You Use Are Not Safe

Mobile banking has been trending in the Indian banking ecosystem. Financial institutions have been promoting and heavily publicizing mobile banking over traditional banking. The strategy is simple: when customers install mobile banking apps on their phones, they can easily process banking transactions such as checking their account balance, transferring money online, requesting bank statements and checkbooks, or activities that would have otherwise been executed at the physical bank branches. Mobile banking security, however, has not been given due attention and has led to breaches of many banks and consumer accounts all over the globe. 

Mobile banking has helped shed a substantial burden on the tireless efforts of traditional banking operations. It also empowers users to access convenience banking anytime and anywhere. Judging by how convenience has changed the way we now look at banking, mobile banking security isn't a luxury that banks can no longer afford to ignore. It is the need of the hour and must be handled right! Preferably by mobile security specialists rather than a generalist who are like jack of all trades but master of nothing.

Is mobile banking safe?

Mobile banking is generally safer than most other online activities. This is partially due to the fact that banks are required to maintain high levels of security and partly because consumers are more cautious when their money is on the line.

However, hackers generally take advantage of weak passwords and vulnerabilities in public Wi-Fi to try to infect devices with malware and steal financial information. Quite surprisingly, most mobile banking attacks are carried out through social engineering, in which customers are duped into handing over their usernames and passwords to hackers, scammers, and other cyber criminals.

Examples of social engineering techniques are phone calls, malicious web links, phishing websites, and more advanced (and less common) attacks like phony banking apps. Falling for a con is much simpler than you might imagine, but awareness is your best defense.

Top 7 reasons why your banking apps aren't safe

Reason 1: Unmonitored security flaws

Most app stores, such as Google Appstore and Android Marketplace, do not review mobile apps based on security features. This makes it quite easy for notorious con developers to design and launch mobile apps that can steal confidential data from users’ devices.

Reason 2: Unsecured mobile devices

It is rare that consumers install a mobile antivirus on their phones while speculating about a possible hack attack. An average smartphone or tablet user does not install any security software on their device, which means that the security available is only a fraction of what is available on a laptop or a desktop. This factor makes smartphones vulnerable to security attacks.

Reason 3: Rising malware for Android

There has risen detected malware for Android platforms by more than 400% over the past 12 months. This is alarming and further raises security concerns for Android app users.

Reason 4: Inter-app accessibility

The technology that keeps apps separate on a smartphone or tablet does not separate them into private sandboxes. This implies that one app can easily read confidential details stored in the other apps on the same device. Who knows, your gaming app may be reading your banking app data all the time!

Good Read: Everything You Need to Know About Open Banking Security

Reason 5: User negligence

The majority of smartphone and tablet users do not even have the basic passcode activated on their devices. This security flaw can potentially give anyone direct access to a consumer bank account through the mobile banking app.

Reason 6: Free wi-fi trap

Have you ever noticed what lies behind a free hotspot or Wi-Fi network at an airport or café? You will be amazed to know that potential hackers may use such free networks as bait to intrude into your mobile network. Users' temptation to use these free networks exposes them to possible hacks.

Reason 7: Improper legal framework

There is no clear legislation so far that identifies various rights of users in case of banking fraud through a mobile app. In case of fraud, users may have to go through a long legal battle with their bank's mobile banking security before they get appropriate refunds.

The worst part about many fraud or cyber attacks is that neither the banks nor the consumers are aware of exploitation until it's too late. We've even seen over a billion dollars strategically stolen from 100 banks over the span of two years. So, how has mobile banking security evolved over the years to deal with these attacks? 

Should you use mobile banking apps?

As bank branches were temporarily closed due to the pandemic, more clients found that they liked the convenience of mobile banking, and data suggests the trend will continue. FIS, a bank technology company, issued a study in mid-May that revealed 31% of banking respondents intend to do more online and mobile banking in the future.

Are banking apps a secure way to conduct banking business? According to the FBI, hackers could use various approaches, including app-based banking Trojans and fraudulent banking apps, to abuse new mobile banking consumers. 

If you're hesitant to use a mobile banking app, remember that security dangers, including the bank lobby, can be found anywhere. An insider threat exists in the possibility that a bank employee will do something criminal, such as steal your banking information.

With a mobile app, there are potential vulnerabilities linked to the app's security posture - flaws in the code, encryption mechanisms, and so on – as well as potential vulnerabilities related to data transmission. However, the bank invests extensively in both scenarios to 'build in' security. Financial organizations keep track of their employee activities and seek flaws in their apps that can be fixed before thieves exploit them. There are also steps you can take to lower your risk.

What steps do banks take to protect their customers?

Most banking applications employ two-factor authentication to verify the transactions they generate. Every transaction involves sending an SMS to the user, i.e., you, with an OTP (One-Time Password) that you must enter and confirm before the transaction can proceed. Your data is encrypted and transported via banking channels with maximum security to protect it from all malware attempts.

Banks have also implemented checks such as device authentication and six-digit PIN verification. This prevents spammers from getting your information by duplicating your personal information. Banks also carefully monitor phony Android apps that impersonate authentic ones to ensure that your information isn't misused or stolen.

Tips on how to make mobile banking safer

Banks are doing what they can to mitigate mobile banking app security, but consumers must also take precautions to protect themselves. Here are a few tips on how you can make mobile banking safer for you:

1. Use strong passwords and multi-factor authentication

The safest way to protect your banking app from scammers is to use a strong password (at least six characters long and made up of a random string of lowercase and uppercase letters, digits, and symbols).

If you're worried about forgetting the password, use a PIN key (something more complex and unique than 1111) or a pattern lock with biometric identification. Multi-factor authentication will also help a great deal.

Customers who use two-factor authentication must log in to their accounts using a password or PIN, and a second method of confirming their identity is by duplicating a code provided to their cell phone through text message.

2. Use only the official banking app

Forged banking apps pose the second most serious security risk in terms of mobile banking. If you aren't vigilant, you could download a bogus banking app forged by cybercriminals to break into your account.

Ensure the app you're installing was created by or approved by your bank. It's generally available on their website. Furthermore, do not connect to your bank account via a mobile browser; they are often less secure than bank-approved apps.

3. Refrain from clicking on malicious links

You pick up your phone, open the email app, and see an announcement from your bank advertising a new service. "You can save up to a thousand dollars per year!" the letter concludes. Follow this link for further information." You click it, get to the landing page, and check-in, but there's a problem, and you're cut off from the website.

You just gave a scammer your username and password. The email you received was not from your bank but from con artists posing as your bank. Beware of such scams. 

4. Don’t use mobile banking apps on public wi-fi

Anyone using a public Wi-Fi network is at risk of being hacked. Most of these networks are insecure, with bad router configurations and weak passwords. Never use public Wi-Fi for mobile banking or any other activity exposing sensitive data.

Conclusion

Is using mobile banking apps safe? Yes. Install the official banking app, keep it up to date, use a VPN while using public Wi-Fi, and keep your phone close at hand! You'll be safer online if you know more about security. You may add extra layers of security and learn to spot threats by using strong passwords and a robust VPN.

That does not, however, render you immune to scams, virus attacks, and hackers. The last line of defense is your common sense. A person who does not take their security seriously is likely a mobile banking breach victim. Following our outlined mobile banking best practices can go a long way.