Mobile banking has revolutionized the way we interact with our banks. Gone are the days when the only way to make a transaction was to visit a location of your bank to do everything in person.
It was bothersome and very time-consuming. Even if you had a relatively simple transaction to make, it would sometimes take hours to get it done. For example, there could just be too many people at the bank so you’d have to wait your turn.
When technology was limited, this was the only way to perform transactions. However, as we saw advancements in this field, the ease with which we could interact with our banks improved significantly.
Telephone banking gave us the first glimpse of what would eventually become the future of banking. Customers were able to perform many tasks simply by dialing into their branch or a centralized customer service center.
Then came the internet and with it, internet banking. It provided significantly more functionality than conventional telephone banking. The banks created powerful online portals that allowed customers to do everything from transferring funds to making bill payments completely online.
The true power of mobile banking was only realized once smartphones became commonplace. When you come to think of it, that wasn’t too long ago. It has only been about two decades since we’ve all been walking around with high-tech slabs of glass and metal in our pockets that simplify our lives in incredible ways.
Mobile banking apps put powerful features in our pockets. Conventional tasks like funds transfers and bill payments are easy enough. It’s even possible to invest in funds, actively trade securities, commodities, and derivatives, manage payment cards, open virtual wallets and do a lot more using mobile apps.
There’s always a security consideration with anything that’s connected to the internet. The convenience and ease that it provides remain a target of bad actors who exploit it for their gain.
That’s why a lot of people wonder if mobile banking safe, particularly since it’s not uncommon to hear about security vulnerabilities or horror stories of how someone was fleeced out of their money simply because they used online banking features. Let’s discuss just how safe mobile banking is.
Understand how mobile banking works
Before you can conclude whether mobile is safe, it’s first important to understand how it all works. It looks quite simple on the surface. You download an app on your phone, punch in your account credentials and you’re set. However, there’s a lot more happening behind the scenes. There are also other factors to keep in mind when looking at the security of mobile banking.
The security features built into the mobile app are the first line of defense. This boils down to just how proactive the app developers who made the app in the first place are. Given the gravity of this situation, most banks would have entire departments dedicated to the development and the enhancement of the security features of their mobile apps.
Even if they outsource the development work to a third party, the banks will place stringent security guidelines that will need to be followed during the development process. A good way to find out if your bank has been paying attention to this is by simply performing some research online.
If there have been data leaks or reports about substandard security, there’s a good chance that it would have been reported. You can usually find a clear trend with companies that generally take a lax attitude towards security. This is a sign that you should switch your bank.
Banks realize that cyberattacks are a major threat to the US financial system. That’s why they’re investing heavily to ensure the safety of their mobile banking services. Not many people would be aware of something called Regulation E.
It limits consumer liability to $50 if an unauthorized electronic funds transfer is reported by the customer within two business days. If they report the unauthorized transfer outside of the two-day window, their liability will be capped at $500.
It’s also important to exercise better judgment
You and the decisions that you make are also directly related to just how safe mobile banking can be. A lot of people get stung by scams or fall victim to cyberattacks just because they’re either not paying attention to what they’re doing or they fail to exercise better judgment.
For example, we’re all quite used to paying for things online. Being a bit mindful of where we’re providing our payment details can make all the difference. No shortage of fake websites exist solely to steal one-time password payment card details. If you don’t exercise caution even when an online vendor’s website appears shady, chances are your payment details could end up in the wrong hands.
A certain level of care should also be taken when downloading mobile banking apps. A general sense of what’s good and what may be bad for the security of your mobile device can prove to be very beneficial as well.
Tips to improve mobile banking security
Don’t use public Wi-Fi networks
Public Wi-Fi is ubiquitous. You can find an open hotspot just about everywhere. That can be quite convenient in many cases but public Wi-Fi networks should be avoided at all costs when accessing your mobile banking app.
You simply don’t know who else is connected to that same open network. Hackers commonly prey on people using open Wi-Fi networks to steal their data. They could intercept network traffic or even spoof pages to appear as though you’re interacting with your bank’s official website.
If you’re not at home or connected to a Wi-Fi network that you trust, at a friend’s house for example, then always stick to using cellular data when accessing mobile banking features on your device.
Make sure you’re downloading the official bank app
You’d be surprised to know how many clones of official banking apps are circulating online. This is admittedly a bigger problem for users of Android devices. That’s because it’s not possible to install apps on the iPhone outside of the App Store.
Cybercriminals widely distribute apps that are meant to look like genuine mobile banking apps. However, they exist solely to steal the login credentials of bank customers. To avoid falling victim to such apps, it’s always recommended to ensure that you’re downloading the official app for your bank.
The easiest way to find the official app is to look for the download link on your bank’s website. They’re usually placed prominently and they’ll redirect you to the page from where the official app can be downloaded.
Enable two-factor authentication
With two-factor or multi-factor authentication, there’s always an additional layer of security on your account. Even if your login details were to get leaked, the second layer of security would make it unable for an attacker to gain access to your account.
The two-factor authentication may rely on a PIN or a passcode. Some banks would send you a one-time password that exists on a registered email ID or phone number, and only once it’s entered will they provide access to the account.
Two-factor authentication isn’t a foolproof security method, but at least it’s better than not having an extra layer of security on your account.
Use strong passwords
This should be a no-brainer. Avoid passwords that are easy to guess or contain familiar patterns, like 1234, for example. You’d be surprised to know that the term “password” is one of the most commonly used passwords worldwide.
That’s why most banks have strict requirements for passwords. They’ll ask you to include numbers, letters, special characters, and often a capital letter as well. It’s a good idea to keep passwords separate as well.
Don’t use one single password for all of your accounts. For example, you wouldn’t want someone to access your banking app just because the password for your email account was leaked.
If your phone supports biometrics, use it!
Most modern smartphones, even the affordable ones, now come with some form of biometric security feature. The fingerprint sensor is the most common of all biometric methods being offered on smartphones.
Most banks tap into this phone feature, meaning that you can secure access to your mobile banking app through the biometric method. The app won’t unlock and thus won’t provide access even if someone were to steal your phone until and unless it recognized your fingerprint.
Choose a bank that understands mobile banking security
As a neobank that exists entirely online, Aspiration keeps mobile banking security at the heart of everything that it does. Customers that open a cash management account at Aspiration can rest assured that they will be provided with robust security features.
All personally identifiable information of Aspiration account holders, including their Social Security number, is encrypted and their passwords are hashed. This ensures the security of their credentials. Aspiration also restricts access to customer data on a need-to-know basis.
It has put in place automated and manual systems to identify and notify customers of any suspicious activity. Multi-factor authentication is used to provide enhanced security for account login.