The use of mobile phones is at an all-time high and mobile banking is one of the fastest growing segments in banking. During the last one-decade, mobile banking evolved from a simple SMS-based basic support service to update customers about their transactions to end-to-end banking services, similar to what one could get when physically present at the branch.
With all these advantages, there are certain risks associated with mobile banking. Let us discuss the ways and mean to avoid the same.
Wrong mapping of the app
This is the most common fraud committed by people within the organisation. For instance, if there’s a bank customer who does not evince any interest in mobile banking, an insider (employee) of the bank could attach a mobile number to the bank account and install a mobile application on that mobile device. In this case, the customer’s account is compromised and the customer does not get any notification about the same.
The increase in the number of mobile banking users is accompanied by a rise in attacks through malware. Malware specifically targeting mobile devices is a real threat. The malware is of different types such as viruses, rootkits, trojans, spyware, malvertising and the like.
It is safer to login using mobile apps for banking than that of logging through your mobile browser. However, there are many fake apps, with exactly the same user interface as the original application, created to steal confidential information shared by the user. So, it is always advisable to download the apps from the appropriate and relevant websites than simply downloading with the help of a search engine.
Further, third-party apps open users to different kinds of risks as these programmes could leverage credential from other applications. For instance, a shopping app could leverage your banking login information or credit card details to access your bank services to facilitate a transaction. Do not store a particular card or bank as your preferred choice of payment in shopping apps.
Fraud via SIM swap
The term SIM swap means replacing the old SIM with a new one. This is normally done when the old one is lost or damaged, or when one needs a different size or type of SIM card. If a fraudster manages to do such a swap without your knowledge, he can carry out numerous fraudulent transactions using your mobile number. For instance, the valid mobile station international subscriber directory number (MSISDN) is moved to another handset. The user has no access to their account and receives no notification. The fraudster, using the other handset, on knowing the PIN, can make transactions in your account.
Avoid using unsecure wi-fi networks
Nowadays, free wi-fi is available at restaurants, coffee shops, railway stations, airports and many other public places. But when accessing free wi-fi, it is important to note that the activity you are conducting may be visible to someone else. Often such hotspots are spoofed by the fraudsters. For example, your local coffee shop’s network may be called CCD. A fraudster may set up a wi-fi at or near that location called CCD1 to trick you into using that network.
To conclude, advancements in mobile technology allow people to do banking activities and thus save time and effort. However, one should be careful and look at the above aspects while doing banking activities.
The writer is professor of finance & accounting, IIM Tiruchirappalli