The advantages of mobile banking to customers are myriad. But so are the threats to mobile banking security.
Mobile banking has become mainstream, but highly publicized breaches and frequent phishing attacks have shaken customer confidence and damaged brand reputations. Technology can solve some of these challenges. Other solutions involve user education.
The advantages of mobile banking to customers are under threat
Mobile banking security faces numerous threats. Customers are just as subject to sophisticated phishing attacks balancing their e-checkbooks as they are in any other aspect of their digital lives.
The advantages of mobile banking to customers contribute to the dangers. Mobile banking means customers can conduct financial transactions wherever they are—but that sometimes means they are banking over unsecured public Wi-Fi hotspots. Many customers don't consider the risks of an unsecured connection when making a quick transfer or paying a bill with their smartphone. Motivated threat actors could set up public Wi-Fi hotspots where people are likely to log in to their banking apps—and then steal their credentials (and possibly more).
Malware also threatens mobile banking security. Hidden apps can run in the background and steal banking information and login credentials after a user closes them. Emails and SMS texts with links that compromise a customer's banking information can look like official communications from financial institutions.
The mobile banking app can be vulnerable, too. And even if a mobile banking app is built to high standards, it needs to be supported by a robust technology infrastructure that contributes to mobile banking security.
The advantages of mobile banking to customers won't offset the loss of confidence, lost customers and reputational damage that comes with a breach that exposes customers' financial data.
The many facets of mobile banking security
Banking security is complicated. Introducing mobility to the equation creates a slew of considerations.
Network needs
Banking apps are often more advanced than their parent organizations' underlying systems. Slow, outdated networks can hinder retail banks from guaranteeing mobile banking security and delivering a seamless customer experience.
Financial organizations looking to bring the advantages of mobile banking to customers must modernize their network infrastructure. Migrating to secure internet transport and deploying a software-defined wide-area network (SD WAN) can boost network speeds, prioritize network traffic for mobile banking and improve digital services connections and customer engagement while enhancing mobile banking security. Branch locations also benefit from faster scalability and more secure Wi-Fi access.
Security protocols
An SD WAN can boost security, but financial service organizations must also implement aggressive security controls to protect customers and detect any unusual activity.
At the organizational level, financial institutions can leverage entity and user behavior analytics (EUBA) to thwart threat actors. Cyber security teams use EUBA because it studies changes in regular patterns to sniff out threats. How does this apply to mobile banking security? If a customer has been conducting transactions in their hometown using their smartphone and suddenly a large funds transfer is made halfway around the world, the system will flag it as suspicious because it goes against the pattern of regular behavior.
Increasing security
Applications such as artificial intelligence and machine learning, which require 5G's speed and bandwidth, can also improve fraud detection. Artificial intelligence and machine learning can detect fraudulent transactions based on a set of rules, but, like EUBA, they can spot suspicious activities based on customer transaction histories and behavior patterns. The more data machine learning algorithms have, the better they can identify risky behavior by triangulating anomalous activity across date dimensions and eliminate manual investigations by providing automated context.
But no matter how well an app is developed, how secure the network is or how smart banking systems get, the customer will always play a role in securing mobile banking.
Smarter customers, secure banking
Because the advantages of mobile banking to customers are widely appreciated and because technology is ingrained in everyday life, it's a little easier to educate customers on how they can bank safely on their phone or their browser. But customer education is an ongoing process, and not every customer is tech-savvy.
Multi-factor authentication is critical for mobile banking security. Requiring users to provide biometric information and a password, for example, can prevent unauthorized access.
Application updates help maintain security. They are also an opportunity to send customers reminders and tips that support risk prevention. Banks must have clear guidelines about using their mobile banking app on unsecured Wi-Fi networks. They should also educate customers about the benefits of multi-factor authentication and how smartphones create threats to mobile banking security. Financial institutions should also be proactive about telling customers what to do if they lose their bank cards or if their mobile accounts are hacked.
The advantages of mobile banking to customers are interdependent on smart networks, devices and users. They must all work together to deliver those advantages—and keep everyone secure.
Learn how Verizon's solutions can help banks deliver a more secure customer experience.