The Growing Threats of Mobile Banking App & Essential Counter Measures

Mr. Abhishek Srinivasan

Online banking has revolutionized the way we manage our finances. It offers unparalleled convenience compared to traditional banking, with features like one-click payments, instant transactions, and potentially higher interest rates. Mobile apps have further revolutionized online banking, making it even faster, more accessible, and personalized, often with attractive features and a user-friendly experience. The adoption of online banking is especially high among the new generation, who are tech-savvy and prefer the convenience of online banking over traditional methods.

However, cybersecurity threats remain a concern for any digital platform. According to Forrester’s Consumer Asia Pacific Survey 2023, 87% of Indians prefer to do all their banking on a smartphone. This statistic highlights the growing importance of mobile banking apps, but it also emphasizes the need to stay vigilant, protect financial data, and ensure safe online transactions.^[1]

Is Online Banking Safe?

Online security concerns are understandable, especially with frequent news of cyberattacks. However, online banking is inherently secure when practiced responsibly. Banks prioritize customer protection with robust security measures like data encryption (128-bit or 256-bit), automatic session timeouts, multi-factor authentication, one-time transaction passwords, signature verification, and continuous account monitoring. These measures make it extremely difficult for hackers to exploit vulnerabilities within the bank itself.

Instead, hackers often target users through social engineering tactics. While banks face some level of increased vulnerability, individuals become the easier target. To ensure online safety, users should practice cyber hygiene by staying vigilant about online threats and taking steps to protect themselves.

Online Banking Risks

Online banking offers undeniable convenience, but navigating the digital landscape requires balancing ease of access and robust security. Here are 4 ways cybercriminals pose threat to online banking apps.

1.    Phishing Scams

Cybercriminals commonly use phishing attacks to steal personal information. These attacks exploit human vulnerabilities by tricking people into sharing sensitive details like passwords or credit card information. Phishing works by tapping into three key factors: impersonation, urgency, and deception, and requesting sensitive information. By leveraging these tactics, hackers steal information they can use to access accounts or make fraudulent transactions.

Research shows that the United States leads in phishing attacks, followed by the United Kingdom and India. In 2023, India experienced 79 million phishing attacks.^[2]

In such instances, it’s essential to be cautious of phone calls or emails from seemingly legitimate banks asking for personal information. Legitimate banks will never request sensitive details like passwords or account numbers through these channels.

2.    Fake online applications

Deception is a common tactic used by cybercriminals. They create fake websites that mimic legitimate banking institutions. These seemingly real sites lure unsuspecting users into divulging personal and sensitive information, such as login credentials and account details.

Phishing emails and spammy links often lead to these dummy websites.  These emails or links might entice users with attractive offers or create a sense of urgency to click.

3.    Identity Threat

Simple or easily guessable passwords are like leaving your front door unlocked. Hackers can use automated tools to try millions of combinations quickly, eventually cracking your password and accessing your accounts.

Moreover, if your personal information, like login credentials or credit card details, is stolen in a data breach (a cyberattack in which a hacker gains access to a large amount of data), it can be used for fraudulent purposes. Hackers might use this information to impersonate you and conduct unauthorized transactions on your accounts.

4.    Viruses

Maintaining online security requires vigilance on both the user’s and the bank’s end. While banks implement strong security measures, using outdated banking apps on public or virus-prone computers can introduce vulnerabilities. Cybercriminals could exploit these vulnerabilities to corrupt banking websites or applications.

Similarly, the rise of mobile banking brings its own set of security concerns. Weak network connections or using public WiFi and computers can expose your data to unauthorized access. To mitigate these risks, here are top security measures to protect yourself from online banking threats.

Ways to Secure Online Banking

Online banking offers a convenient and accessible way to manage your finances, but with this ease comes the responsibility of staying secure in the digital world. As online banking grows, here are some essential tips to help you protect yourself against evolving cyber threats.

1.    Maintain Cyber Hygiene

Users should maintain basic cyber hygiene while using online banking services, some of which include:

• Clearing cache after each online banking session.
• Manually logging out of mobile apps, especially if automatic logout isn’t available.
• Shredding or securely erasing bank statements from your computer, phone, and physical copies.
• Using strong, unique passwords and multi-factor authentication.
• Not sharing passwords, OTPs, or other sensitive information with anyone.
• Securely storing passwords using a password manager.
• Avoiding clicking suspicious links, especially the promising deals received in emails or text messages.
• Only conducting online banking on a secure network.

2.    Set Strong Passwords

Strong passwords are the first line of defense. Unfortunately, many users create weak passwords that incorporate personal information like names, birthdays, or pet names. This information is readily available online through social media profiles, making it easy for cybercriminals to leverage brute-force attacks and crack these passwords.

To enhance your online security, it’s crucial to establish complex and unique passwords for all your accounts, particularly banking sites and remembering complex passwords can be challenging. Passwordless authentication, an emerging technology provides a more convenient and secure method for online banking than traditional password-based systems. By using alternatives like biometric verification, one-time codes, or authentication apps, it eliminates the risks of password theft from phishing or data breaches and eases the burden of managing multiple passwords. This approach streamlines the authentication process, enhancing user experience while ensuring robust security.

3.    Employ Two or Multi-Factor Authentication

Many banks provide two-factor or multi-factor authentication (MFA) for added security. This extra layer goes beyond your standard password and adds an additional verification step during login. MFA can utilize various methods, including biometrics, such as fingerprint or facial recognition, one-time passcodes (OTPs), or security tokens.

By requiring an additional factor beyond your password, MFA acts as a powerful security barrier, preventing unauthorized individuals from accessing your online banking account, even if they possess your stolen password.

4.    Update Applications Regularly

Banks constantly release updates that fix vulnerabilities and improve security for their mobile apps. To ensure your financial information remains protected, always update your banking app as soon as an update becomes available.

5.    Sign Up for Bank Notifications

Real-time monitoring is crucial for safeguarding your online banking activity. Sign up for bank notifications that keep you informed of any suspicious events, including:

• Unknown transactions: Get immediate alerts for any charges you didn’t authorize, allowing you to take swift action if needed.
• Failed login attempts: Be notified of unsuccessful login attempts to your account, potentially indicating unauthorized access attempts.
• Account changes: Stay informed of any modifications to your account details, such as address or phone number, to identify potential fraud.
• Password edits: Receive alerts when your password changes, ensuring you know of any unauthorized modifications.

These timely notifications enable users to notify their banks if they notice any suspicious activity immediately.

6.    Use Good Antivirus Software

Antivirus software plays a crucial role in safeguarding your online banking sessions. It acts as an additional layer of security by actively scanning for and identifying malicious software like trojans, keyloggers, and other malware. By detecting and neutralizing these threats, antivirus software helps protect your personal information from theft or unauthorized access during online banking activities.

7.    Refrain from Using Public WiFi or Computers

Public WiFi and shared devices pose a significant risk when conducting online banking. These networks often lack proper encryption, making it easy for hackers to intercept your transactions and infiltrate the network. This could grant them access to your sensitive banking information.

If you must use online banking on a public network, prioritize security by using a Virtual Private Network (VPN) on your personal device. A VPN encrypts your data, creating a secure tunnel for your transactions. Remember to clear your cache and any downloaded files after your session to minimize further the risk of leaving sensitive information behind.

8.    Monitor Regularly

Regular monitoring of your bank accounts is crucial for identifying suspicious activity. By reviewing your statements and transaction history frequently, you can quickly spot any unauthorized transactions. Early detection allows you to report them immediately to your bank, increasing your chances of recovering lost funds.

Similarly, if your credit card is lost or stolen, act swiftly. Report it to your bank or block it directly through your mobile banking app to prevent unauthorized use. This quick action minimizes potential financial losses.

9.    Only use Trustworthy Financial Apps

With so many financial apps offering competitive features like budgeting, bill pay, and shopping, it’s easy to get overwhelmed. However, prioritizing security is crucial before entrusting your financial information.

Before signing up, take steps to verify the app’s credibility. This includes checking app store ratings, reviewing security policies, and researching past data breaches. Additionally, investigate the measures they take to safeguard user data. By conducting this due diligence, you can choose a financial app that prioritizes security and protects your hard-earned money.

Conclusion

Online banking offers a winning combination: unparalleled security, convenience, and control over your finances. It’s no wonder it’s rapidly becoming the preferred method for managing money. While banks employ robust security measures, staying vigilant against evolving cyber threats is crucial. By adopting the security practices outlined above, you can ensure your online transactions remain secure and your finances protected.

(Article by Mr. Abhishek Srinivasan, Director Product Management at Array Networks, and the views expressed in this article are his own)