Every news page is constantly full of stories regarding data leaks, hackers stealing personal information, credit card information being sold on the dark web, and companies experiencing devastating security breaches. Fintech companies are especially concerned because they handle sensitive financial information and are common targets for cyber attacks. Mobile banking applications are one of the most vulnerable points of entry, so can users really be sure they are secure? We will delve into the issue in more detail in this article, so keep reading if you are interested in this subject.
What is mobile banking?
Customers can conduct their financial transactions using mobile devices like phones or tablets thanks to mobile banking, also known as m-banking, a service offered by banks and financial institutions. It uses dedicated software, often designed specifically for the institution, to provide a secure way for customers to access their accounts, transfer funds, take out loans, pay bills, and more.
In the US, over 70% of people aged 17 to 25 use primarily mobile banking to handle their finances. It is not uncommon for other generations to see an increase in mobile banking usage as well, as it offers higher convenience and accessibility. In general, it is predicted that the trend toward mobile banking will continue to grow as technology advances and more and more people rely on their smartphones instead of personal computers or traditional, paper-based banking methods.
Are mobile banking apps safe?
The rise of mobile banking also raised security and privacy concerns. While the fintech industry, which is largely responsible for developing mobile banking apps, is working on implementing the best security measures in its products, the risks still exist.
Every reputable fintech app development company must offer strong security methods, like extra encryption, multifactor authentication, and regular security updates, to not only ensure the user’s safety but also to adhere to strict regulatory requirements. If the app was developed by a reliable, trustworthy company, there is likely no reason to worry.
While users can take their own steps to protect their money and information further, if the app was not designed with high security in mind, their efforts may be futile. That is why it is essential for developers to prioritize security from the initial stages of app development and continuously update and improve all security measures.
What are the possible security risks when using mobile banking apps?
There are some common risks associated with mobile banking apps; some can be easily avoided when the users are informed of the danger, while others are a bit trickier and require extra care on the part of the app developer and the financial institution to mitigate. Let’s take a look at some of the most common risks that must be taken care of while mobile banking app development.
Banking Trojans
While trojans have existed for decades, many are now specifically designed to target mobile banking apps. They may be distributed through e-mails, in downloaded files, or even disguised as legitimate applications in app stores. Their makers also often use social engineering to manipulate users to open or install malicious files, for example, by pretending to be a bank official and calling the client.
Trojans can be operated remotely, so you can become the target regardless of your location. If they are not detected and removed promptly, they can steal sensitive information such as login credentials, personal data, and financial details.
Physical Theft
If your banking app is not secure enough, there is a risk of unauthorized individuals accessing your accounts and likely causing financial loss. It may happen if your phone gets stolen and the custom mobile application development that created your banking app does not implement proper security measures to protect your information. For example, if it is lacking in extra authentication methods, the thief can break your password easily and gain access to your funds. This opens the door for financial fraud and identity theft.
Some solutions that developers can use to prevent unauthorized users from accessing the app include biometric authentication, for example, fingerprint or face recognition, and multifactor authentication. These safeguards can significantly reduce the risk of unauthorized access to the banking app.
Poor Server Security
Some mobile banking security issues are found on the server side. If the server is not properly secured, the data stored on it can be vulnerable to hacking and unauthorized access. Considering how valuable this data is, app developers and financial institutions must choose reliable hosting services that offer strong security measures.
There are many ways in which a server can be protected from potential attacks, for example, by monitoring login attempts, updating the security systems regularly, and implementing encryption protocols for data transmission. Additionally, routine security audits can help identify any vulnerabilities before it is too late.
Fake Apps
For people working in mobile banking app development, the existence of fake apps made to look like genuine applications. They can even sometimes hide in plain sight in app stores. Many clients, especially those unfamiliar with new technologies, may not be able to distinguish between a legitimate app and a fake one, making them vulnerable to online threats. It is crucial for developers to continuously educate users on how to identify and avoid fake apps to protect their sensitive information.
Warning bank clients and app users about harmful software that might use a misleadingly similar interface to the original application is very important. Encouraging people to double-check and verify the source of the app before downloading can help build safer digital banking.
Will Mobile Banking Get More Risky in the Future?
Today, the risks associated with mobile banking are higher than ever due to the increasing sophistication and skill of cybercriminals. However, it is not a reason to not trust digital banking altogether. By staying informed and taking the necessary precautions, everyone, from the developers to the end user, can be safe and secure.
Online threats grow in number and complexity, and so do the methods used to protect personal data and finances.
