Understanding Mobile Banking Apps Security From Banks Perspective

Mobile Banking Apps Security

In today’s fast-paced digital world, the convenience provided by mobile banking apps is undeniable. It has enabled users to carry out transactions, check balances, and much more anytime from anywhere. However, with this ease comes a notable concern – vulnerability.

Studies show that 42% of customers hesitate to use mobile banking apps due to trust issues. The susceptibility of banking apps is a familiar concept. It’s a reality we see daily, with various reports on digital fraud and identity theft.

But what makes these apps such potential hotspots for security threats? How can banks make their apps more secure? We’ll try to find the answers to these questions and much more in this blog.

Importance Of Secure Mobile Apps For Banks

Protects User Data

We know that user data is a significant resource for banks. Mobile apps gather user information, such as contact details, location information, and browsing history.

You can’t imagine what could happen if this information caught up in the wrong hands. That person can use it maliciously for financial fraud or even identity theft. User data is safe from unauthorized access through secure mobile app development.

Develop Trust Among Users

Approximately 46% of app users remain concerned about their data and account safety. Secure mobile banking apps help create customer trust. When they see that their data and Information are secure, then it is more likely that they will find your app trustworthy. It will increase the demand for your app and its goodwill in the market.

Secure Source Code

Secure development comes with a secure source code, providing safety against hackers hacking the system. When an app is built by a mobile application company using secure source code, it reduces the possibility of alterations by cyber threats.

Protection Against Confidential Information

Secure app development helps prevent the leakage of sensitive data, including trade secrets, user information, intellectual property, etc. Secure coding and encryption ensure that sensitive data is protected and safeguarded with the utmost care.

Knowledge Of Threats

Secure mobile banking apps prevent threats and provide knowledge about upcoming threats. According to Experts, secure app development protects businesses from potential premeditated or plotted assaults by taking a proactive attitude and continuously monitoring actions both on networks and outside.

Since it eliminates errors, businesses have been performing this kind of monitoring for some time.

Enhances User Experience

Ensuring your application’s user is happy and enjoys it is crucial. Bank customers today are delighted when they think their data is safe, rather than only with an interface that is simple to use and comprehend.

In addition to providing the highest level of data security, Secure mobile app development ensures that the app’s user experience is easy to use and comprehend, thus enhancing user experience.

Guarantees Business Continuity

Banks are accountable for damages users suffer due to security breaches. Moreover, a security breach might seriously harm a bank’s brand. Secure mobile banking apps guarantee business continuity by protecting user data and preventing security breaches that might affect a company’s image.

Why Are Mobile Banking Apps Vulnerable?

The Risks Of Open Networks

The extensive accessibility of networks is a prime advantage and one of the significant security threats for banks. With users accessing apps for banking purposes from various devices, networks, and locations, keeping track and ensuring the security of every transaction point becomes an uphill battle for banks.

Consider the Wi-Fi networks that users connect for mobile banking apps and more. Customers can be sipping their morning coffee at a café while transferring through your banking app, utilizing the café’s Wi-Fi. The problem arises when these networks aren’t safe. Cybercriminals often lurk on such open networks, waiting to exploit any vulnerabilities.

Mobile Phone Vulnerabilities

Another reason underlining the vulnerability revolves around mobile devices. Some users fall prey to the lure of jailbreaking or rooting, bypassing the manufacturer’s operating system limitations thereby exposing the device to potential breaches.

Phishing Attempts

Phishing is a dominant method that unscrupulous elements use to trick users into surrendering their login credentials. All it takes is one link clicked in good faith or answered security questions and your banking details are compromised.

Common Cyber Attacks That Banks Should Be Beware Of

The growing intersection of finance and technology has transformed how consumers interact with their money. However, this transition has come with new threats, namely cyberattacks.

Trojans In The Banking System

Although not particularly new, banking Trojans have grown more sophisticated over time. Like legitimate software, malware infects computers and mobile banking apps to steal credentials and confidential information.

Examples are Emotet and Trickbot, which initially target individuals but can expand to an entire banking system. Security protocols and continuous staff training can help to guard against hostile Trojans.

Infrastructure Attacks

Infrastructure breaches target the fundamental digital structures of a bank. By exploiting vulnerabilities in servers, attackers can cause extensive disruptions.

Remember the SolarWinds incident & the Bangladesh Bank Heist? They highlight the importance of having robust multi-layered security strategies and regular audits of security systems.

Fake Mobile Banking Apps With Deceptive Credibility

The Google Play and App Store have seen an influx of fake banking apps that mirror established banking applications. These technology bandits primarily seek to siphon off login credentials and persuade users to provide sensitive personal information.

A report by the Ponemon Institute found that fake app-related attacks cost banks an average of $4.2 million per annum. It emphasizes the need for banks to ensure enhanced security in their applications and educate customers on authenticating official banking apps.

Identity Theft

Identity theft remains a prevalent cybersecurity threat in the mobile banking apps industry. Cyber-criminals use phishing attacks or brute force methods to access personal data, allowing them to commit fraud and steal funds.

The 2017 Equifax data breach, where the personal details of 147 million people were compromised, underlines the severity of identity theft.

DDoS Attacks

Distributed Denial of Service (DDoS) attacks attempt to overwhelm a bank’s online services, causing downtime and crippling functionality. The UK’s National Crime Agency noted that DDoS attacks most frequently target banking services.

What Can Financial Institutions Do For Mobile Banking App Security?

Multi-Factor Authentication

As the name denotes, users must have multiple credentials to access. This defense security for apps brings another layer after the single password that can be a one-time password, biometric authentication, facial recognition, or two different layers of passwords.

Use Of NFC-Enabled SIM Cards

NFC or Near Field Communication SIM cards work on short-range wireless communication. Users get additional security as NFC offers a way for devices to communicate with each other within a few centimeters of distance.

Let’s say the bank has an NFC-enabled kiosk or branch where users will visit, and then they can complete the transaction. Users aren’t required to sip the card to the machine, and even without carrying the card anywhere, they can do many transactions.

You must have seen the workings of automatic hotel room keys, metro train cards, e-tickets through machines, car keys, and tap-enabled credit/debit cards. Once the user has an NFC-enabled SIM, the phone works like a card and facilitates the transaction.

End-To-End Encryption

Strong data encryption is a must for any app. Data Encryption is one of the most important and influential ways to save an individual’s data from getting corrupted.

It is the process in which plain text, like an email or message, is translated into an unreadable format. So, even if the data is stolen, hackers can’t decode it, making it useless.

Encryption is an old but relevant technology for the best mobile banking app security. Online transitions involve multiple players: payment card issuers, merchants, merchant banks, card brands, swiping machine companies, and network connection providers.

That means a secure data transmission is necessary for fraudsters to avoid getting any data. End-to-end encryption is a way to keep data safe and sound from the eyes of eavesdroppers and people with wrong intentions.

Ensure Real-Time Text And Email Alerts

Scams happen around the globe just because users do not notice the alerts received via texts and emails in real-time. Time is crucial to save customers from getting exponential losses. When banks send quick and real-time notifications, customers can inform the banks in case of any security compromise or fraud. After that, the bank can take necessary actions per the procedures.

Mobile app development companies may help banks by having an app that notifies users.

  • Wrong user ID/password in the mobile app while logged in.
  • Amount spent beyond the specified limit
  • Apps installation on different mobile phones
  • Any debit/credit transaction

Final Remarks

Given the ever-evolving nature of cyber threats, it’s challenging to eliminate the vulnerabilities of mobile banking apps. However, being aware of these vulnerabilities and adhering to preventive measures can drastically mitigate these risks.

The key to safer mobile banking lies in responsible usage and always vigilance. Each stakeholder, including banks, plays a part in this.

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Co-Founder & Director, Business Management
HybridAppBuilders help you find the best app developer for your needs. We believe in sharing knowledge and increasing awareness, and to contribute to this cause, we try to include all the latest changes, news, and fresh content from the mobile app development world in our blogs.