Mobile Banking: How Safe Is It?
Written on Monday, May 11, 2009
The article is very complete, and I recommend you read the whole thing, but I have highlighted the best bits, for those that just want a brief overview.
Current options for mobile banking include:
More than a million Britons regularly use their mobile phones to check recent transactions on their bank current accounts or to view an account balance. Most customers receive this information in the form of text messages, but a number of banks now allow customers to download secure software that enables them to transfer money between accounts or top up prepay phones.
But how secure are these technologies and what safeguards are in place if your phone is lost or stolen? Times Money reviews the main services that are available and examines the security implications for banking from the palm of your hand.
Text messages
A number of high street banks now offer text message services for no charge. You can set up alerts that are sent out when you get too close to your overdraft limit, you can receive a weekly balance reminder or a notification every time a large amount is spent in a single transaction on the debit card attached to the account.
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Text messages are the safest form of mobile banking. No information about your account is stored on your phone and the information that you receive would not be enough on its own for fraudsters to access your money if the phone was lost or stolen.
Mobile money manager
An increasing number of banks allow you to do more on your mobile than simply receive text alerts. These mobile banking services allow you to transfer money between savings and current accounts, view your balance and your last six transactions and top up pay-as-you-go mobile phones.The software has been developed by Monilink, which is 50 per cent owned by the banking industry. You first need to download software to your phone. To access your account, you must enter a five to eight-digit password. Mr Lukies says: “The application is very secure. It verifies that your account is being accessed from your mobile number and requires a password, making it impossible to use if your phone is lost or stolen.”
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Smart phones
About half of all new phones now allow individuals to connect to the internet — most through wi-fi connections in “hotspots” such as pubs, coffee shops, large railway stations or even town squares, or over the 3G network.Jon Corke, of What Mobile magazine, says: “Mobiles are catching up with the iPhone and many now offer the full internet experience. These smart phones are increasingly popular and people expect to be able to surf the net.”
...Tony Neate, of Get Safe Online, the government-backed service, says: “Mobile banking is relatively secure because there are not as many viruses, trojan horses or malware that target mobile users. However, it is important to protect your phone in case it is lost. Use a PIN to lock your phone and remember not to store internet banking username or passwords in your phone memory.”
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Smart phones with Bluetooth, which allows wireless communication between devices, are also open to attack. However, Mr Corke suggests that you cannot be the victim of an attack if you remember not to accept or download attachments or software from individuals you do not know. He says: “If a message appears on your phone asking you to accept a programme sent from someone you do not know, reject it.”
Also, it looks like mobile payments (as in payments done using your mobile instead of your debit/credit card) are soon becoming a reality:
Handsets to offer rival payment option
In less than 18 months you will not only be using your phone to check on your most recent bank transactions, you could be using the handset to make payments too.
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Barclaycard and Orange are working together to introduce Near-Field Communication technology across Britain next year. Orange says that this will offer more flexibility than contactless cards, which are limited to payments of less than £10 because no PIN is required. Using a mobile phone, customers will be able to type a PIN into the handset, allowing bigger payments to be made securely.
The article also contains information about charges for these types of services from various banks, so if you're thinking of venturing into the area, you might find this is a good guide.
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I think this is something that a lot of industry and consumers are looking at and are concerned with. I believe that this is more of a perception issue that reality. We had these same concerns with internet banking and debit cards. The mobile banking technology is not that different from the internet as a whole and the biggest threat to security is "people" and our continued use of the same password, using birthdays and just not taking care.
We had these same concerns with internet banking and debit cards. The mobile banking technology is not that different from the internet as a whole and the biggest threat to security.