A decade back, the thought of handling your finances online seemed ludicrous. After all, serious deals require eye contact, signatures, perhaps even a handshake - right? Well, that line of thinking is all but done.
Mobile banking has exploded. The latest statistics show that around 60 million Americans have embraced mobile banking. That's a massive chunk of the nation's smartphone users, and it's making life more convenient than ever before.
However, is there a dark side to banking with your smartphone? Could it hold unseen dangers that are putting your finances, or even your personal identity, at risk?
This blog will assess how risky mobile banking is, and suggest some ways for customers to minimize the dangers.
How dangerous is mobile banking?
It all seems so simple. With a few simple taps, you can use your phone to access a huge range of financial services.
Yet a simple surface hides a complicated background. Without knowing what hides behind the veneer of a clean GUI, it can be difficult to grasp the dangers. Take these threats, for example:
Occasionally, the weak point of mobile banking is your mobile device itself. Just as any modern computing device, Android, iOS, and other mobile systems are vulnerable to malware.
This malware can linger on your device, waiting for the moment when you enter your payment details. After that, those details could be transmitted to criminals anywhere in the world.
Many people think malware and viruses are a thing of desktop devices and Windows in particular. This assumption can be fatal - if you’re not expecting a robber, you won’t protect yourself from him.
Mobile malware can often be tricky to remove, and it's surprisingly easy to contract. Sometimes, a single app download can do the trick. It's even possible to infect Android phones via a single text message.
In one of the most sinister malware agents yet discovered, attackers actually created fake banking tools which posed as authentication gateways, fooling account holders into directly sending their login details.
And don't assume you know how to tell the real thing from imitations. Modern phishers are experts at creating believable apps, and anyone can fall victim to their work.
2. Data leaks and breaches
Even if you’re protected from malware and hackers, there’s the issue of lax privacy and security practices at companies handling your financial data.
When you use mobile phones to make purchases, the company you are dealing with needs to know your account details to authenticate your payments. Unfortunately, clients simply have to decide whom to trust or avoid.
Huge companies like Yahoo or British Airways have lost millions of customer records to hackers. More importantly, global banks aren't immune. In 2018, HSBC announced a huge leak of customer credentials - the information which allows hackers to pose as bank customers when extracting account details.
So when you bank with your phone, you rely on others to keep your payments safe and sound. And that's not guaranteed.
3. Insecure internet connections
While there isn’t much you can do about poor security at your bank, there’s a lot you can do on your end. Outside of malware protection, there is also connection protection.
Whenever you bank remotely, you should do so over 100% secure connections. You don't want to transmit account details over networks that are vulnerable to hackers under any circumstances.
A considerable proportion of public wifi networks are unsecured, leaving the window for hackers to insert themselves between yourself and the router, hijacking sessions and stealing data. This could happen at your local coffee shop or an airport. Either way, it presents enormous risks for mobile banking.
If you bank via unsecured wifi, don't be surprised to become a victim of fraud. It's not safe, and the dangers can be mitigated via tools like VPNs, so why take the risk?
Reducing the risks of mobile banking
As we've seen, banking on your smartphone isn't a risk-free activity. In fact, it can be very hazardous indeed. So what can you do in response? Do you have to stop using your phone to bank and make payments? Not at all. You just need to boost your smartphone security.
Let's think about a few easy ways to do so.
1. Use a VPN
As more and more companies and individuals realize, VPNs are an essential part of any cybersecurity setup. VPNs route your traffic through a remote server, anonymizing your IP address. More importantly, they encrypt all your data, removing the chance that some man-in-the-middle can use it for malicious purposes.
You should always engage a VPN before logging onto public wifi networks, especially if you intend to then log into your online banking account. It's just good smartphone practice.
But before you download the first VPN you find – beware. Not all smartphone VPNs apply the same level of protection. Some even feature malware, which compromises your device. That's why we advise choosing one from our lists of best Android VPNs and best iOS VPNs.
2. Find a good antimalware package
To combat the malware threat, find a good antivirus/antimalware service. Malware is one of the primary risks for your financial security - hackers and other cybercriminals often use it to extract sensitive financial information. This means you need to protect yourself as much as possible.
Vendors like Bitdefender, Avast, and Kaspersky have all come up with Android antivirus apps which consume relatively few system resources and offer comprehensive inoculation.
And remember to update your chosen package regularly. Hackers are constantly seeking new ways to work around mobile banking safeguards. In that situation, and out of date antivirus package is as bad as having no protection at all.
3. Don’t use mobile banking on public wifi networks
We can’t repeat this one enough - public wifi hotspots are a prime hunting ground for cybercriminals of all shapes and sizes. So, unless you’re using a VPN service (and a reliable one at that), avoid mobile banking on public wifi like the plague!
To be completely secure, try to access your banking portal at home or behind work firewalls, and resist the temptation to do so with a latte at your favorite coffee shop.
This is particularly important if your bank doesn't offer a specialist app for banking on your smartphone. In these cases, you may be able to bank online via a web portal. But this is much less secure than dedicated apps, and it's just not a great idea to access these kinds of portals when you are out and about.
Should you skip mobile banking altogether?
Certainly not - mobile banking is very convenient, and it’s here to stay. Furthermore, if you follow some simple instructions, you’ll be able to avoid all the threats related to it altogether.
From a reliable VPN to antivirus and discipline when using public wifi, solutions aren't hard to implement. And with dire outcomes when hackers access our bank accounts, why not take the time to tighten up your mobile banking setup?