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Risks associated with Mobile Banking

September 26, 2012 at 11:36 pm

With the smartphone market literally exploding with users, it’s no wonder that Cyber criminals are trying to cash in on the action as well.

It has long been known that there are more inherant risks associated with online banking than by physically going to the bank. However, with cellular technology advancing, and people wanting more apps for their phones, banking institutions came up with mobile apps for their customer base.

Although this has offered more flexibility for the average consumer, it has also opened a sort of “pandora’s box” in terms of mobile-malware.

However, even with these conveniences at hand, many people are still hesitant to install these apps on their mobile devices, and for good reason. “According to Metaforic, 68% of smartphone owners who have not yet adopted these apps are holding back due to security fears, while only 12% believe that the effort of downloading and installing such apps doesn’t justify the convenience.” This coupled with the fact that both Android Malware is up 3,325% (that’s not a typo), and that 92% of the top iphone apps have been compromised makes for a pretty compelling argument against mobile banking.

In fact, Gartner Security has now reported the first publicly announced banking app losses, to the tune of $78M+. (stolen via automated back-end servers targeting people’s online accounts). The forseable trend is that this will continue to be the case as mobile apps gain in popularity and capabilities.

“As the convenience of smartphones fuels the surging popularity of mobile banking apps, it’s clear that the average user may not understand the risks involved, and is not taking the security steps needed to protect their mobile devices,” said Dan Stickel, CEO of Metaforic. “Unless mobile apps are immunized against unwanted modifications, both users and banks face potentially staggering financial risks. It’s just a matter of time until a major breach occurs.”

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