Top 7 Reasons Mobile Banking Apps Aren’t Safe (Yet)

A new study produced by The Ponemon Institute and ThreatMetrix (Mobile Payments & Online Shopping – October 2011) states that only 29% of consumers use mobile banking apps on their smart phones and tablets. Of those that don’t participate, 51% cite security reasons for their lack of participation. In other words, consumers like you and I are not yet comfortable with mobile banking. And our instincts are correct! Why shouldn’t you be comfortable with mobile banking appsquite yet?

Top 7 Reasons Why Mobile Banking Apps Aren’t Yet Safe

  1. Because most app stores (e.g., Android Marketplace) don’t review apps for security, it is very easy for criminals to post malicious apps that steal information from your mobile device (like your bank account numbers).
  2. The average smartphone or tablet user has installed no security software on their mini-computer (that’s what smartphones and tablets are), meaning that they have only a fraction of the security of a laptop or desktop.
  3. Detected malware developed for the Android platform alone has increased by 400% in the past year.
  4. The technology that keeps apps separate on your smartphone or tablet doesn’t separate them out into private sandboxes, meaning that one app can read the juicy details stored in the other without much difficulty.
  5. Most smartphone and tablet users don’t even have a basic passcode set up on their device, giving anyone with access to it potential access to your bank account.
  6. The temptation to use free WiFi hotspots at cafes, airports and hotels lures people into banking over insecure networks (it’s easy to sniff (spy on) what you send over these free, unprotected networks.
  7. There is no clear legislation (that I have seen) governing your rights to receive a refund if your bank account is fraudulently emptied due to mobile bank app insecurity. Is the burden of proof on the user to protect their handset and software, or on the bank. Only precedent and real live court cases will answer this question over time.

Will mobile banking apps one day provide a secure, viable form of online banking? Absolutely. Are we there yet. No way.

John Sileo is a keynote financial speaker on topics including identity theft, cyber security, fraud trends and trust. His clients include the Pentagon, FDIC, Experian, Pfizer and Homeland Security. Bring him in to motivate data security within your organization. 1.800.258.8076.

 

 

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2 Responses to Top 7 Reasons Mobile Banking Apps Aren’t Safe (Yet)

  1. Melisa: January 10, 2012 at 12:11 pm

    Hi,
    I’m wondering if the mint.com app falls into this category. If so, would you feel comfortable using their website but not the app? Thanks!

  2. John Sileo: January 13, 2012 at 8:13 am

    While phenomenally convenient, I am not currently a fan of financial aggregation sites. It seems like they take great pains to provide security, but I am leary of anyone outside of my family having access (even for one time) to every bank, brokerage and mortgage account that I have. Too much information in one place. I hope this helps. John

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