Mobile Banking App Security: How Safe Are Your Accounts?

Lyndon Seitz
Writer
Dolores Bernal
Editor
May 28, 2024

If you’re like most of us, you use a mobile banking app. They have become extremely convenient, allow us to avoid a trip to the bank just to deposit a check, allow us to check accounts (or even investments) on the go, and can offer so much more.

However, given that they are linked to what is effectively our financial life, it is rational to have some concerns about it. A leak of your account information could lead to identity theft or just regular old theft. A major security vulnerability could be catastrophic to the industry and people’s personal lives. 

Here’s what you need to know about the current state of mobile banking app security and how you can better protect yourself on these apps.

What Risks Exist with Mobile Banking?

Mobile Banking App Security

There are many risks to mobile banking, and thankfully most of those are mitigated by security professionals and app developers working for banks for that purpose.

However, there are still issues, and many of them are on the user side of things. Human error accounts for most data breaches; no programmer can compensate for a user who doesn’t care about their security.

We can’t go over every risk, but there are the most common ones:

1. A Stolen Device

Phones can get lost or stolen. They aren’t large, can easily be pickpocketed, and dropping them is easier than one thinks.

Criminals count on this, and stolen phones are worth money to them in more than a few ways. In larger cities, there is a whole underground market for the devices, and data collection is an additional profitable step for criminals.

If your device gets stolen, the thief will try and get into your accounts first if they think it is feasible. They know they have a limited time to do so and that many people at least partially leave their login details input on their phones.

Defense: Have a plan if your device gets lost or stolen. Apple has features specifically for this, and you can get apps that will mostly do the same for Android. Additionally, keep a close eye on your device and don’t leave it unguarded.

2. Malware and Trojans

One of the biggest concerns you can have with your phone is malware. Normally your banking apps are secure, but malware can be tricky. It can watch you as you input your login information. It can read the information as you receive it on your phone. 

There are also Trojans, which won’t make your phone act much differently but can infiltrate your phone and send information out to cybercriminals. They usually disguise themselves as legitimate apps or programs, so you’ll download them yourself, often advertising themselves as free.

Whatever the type of malware, the goal is to steal your information and gain access to your accounts, including your mobile banking information and accounts.

Defense: Avoid risky or suspicious websites; only get your apps from an official app store. Additionally, you may want to consider an anti-malware app if you’re using an Android phone.

3. Mobile Banking App Security Exploits

Even the best teams and developers will still develop apps with security exploits (though the best ones will certainly have fewer). Hackers naturally look for these exploits, and while some will report them to banks, many will seek to find a way to profit through them.

If used, these exploits could leak information about you and your account or give cybercriminals easier access to your accounts. In any event, you should know they exist and are a risk with any app.

Know that there are different levels of potential risks and exploits. Some are minor and only usable in extremely specific circumstances; others are more severe, making the headlines (at least in some circles) when they come out.

Defense: I have to be honest and say there isn’t much you can do about this one except to be generally vigilant. Otherwise, you may want to consider switching banks if your bank has a clear history of these problems.

4. Phishing Scams and Fake Texts

No amount of security will help in the face of letting a scammer or hacker effectively walk through the front door of your mobile banking account. And that’s what falling for a phishing scam effectively is. Scammers will create phishing scams, including those from fake or imitation banking websites, to get ahold of your information and login details.

One common thing you might see with banking and bank account-related scams is fake texts, supposedly from the bank itself. These are common, and will usually try to get you to click a link or download a file. Ignore them and learn how your bank actually texts people.

Defense: Learn more about phishing scams and their common variants. If something sounds suspicious, don’t click on any links or follow any instructions. If you’re ever uncertain, you should contact the bank directly from your end to see if there’s an issue.

5. Public WiFi Usage

You’ve likely heard of the dangers of public WiFi before, but do you know why it’s so dangerous?

The reason is sniffing or man-in-the-middle attacks, in which a hacker or cybercriminal will listen in on your traffic or interject themselves. By doing this, they will try to get your information and then use it to log into your accounts, including your mobile banking app accounts.

Additionally, your banking app is likely encrypted independently, but other information you send online, perhaps relating to it, is not. Think of the websites you visit that aren’t encrypted, the messages you send, and other less secure channels (even if you don’t know if they’re not so secure).

Defense: Avoid using public networks for anything except the most mundane of browsing tasks. It simply isn’t worth it. Alternatively, use a VPN when you want to use a public network. They are widely available and worth every penny.

6. Fake Apps

If there’s a major smartphone app, you can bet there’s a pale malware imitation of it, hoping to catch people off-guard when they download it from a shady unofficial app store.

This includes banking apps.

Typically, the goal would be to get you to log into the fake app using the login information of the real app. The fake apps record your inputs and send them to cybercriminals. Naturally, this is not an ideal outcome for you.

Defense: If you only use an official app store for your phone, you’re unlikely to run into a fake banking app, especially for a large bank. Also, go directly to the app store and search for your banking app from there, or alternatively, get a link right from the bank’s official page.

Have There Been Breaches?

Yes, or there have been some that were imminent for one reason or another. There are security flaws in many banking apps.

There’s also the possibility of breaches we don’t know about because the bank never found out or they might want to keep the breach quiet. Naturally, this would be a huge scandal, but I wouldn’t put it past some banks to try.

How Can You Protect Yourself?

  1. Be especially careful when using your phone, specifically your mobile banking app, in public. Someone might try to look and get your password.
    • Avoid using public networks without a VPN. It isn’t worth it compared to a little bit of data usage.

  2. If there are security measures available for your bank account that you aren’t using, start using them, even if it is a little inconvenient.
    • Biometric authentication has come a fair way, but whether you can use this will depend on your phone’s model, how good your bank app’s software is, and other factors. It can be nice to try out, but it isn’t to the point where I’d universally recommend it.

  3. Understand what makes your data valuable and what scammers will do to get it. Our other articles can help with this, but general research and review over time would be a helpful habit to cultivate.

  4. Start using security tools and programs. The experts who make them know what to defend against and look for, and they have more time than you do to develop defenses.
    • A security program on your phone and computer is recommended.
    • An identity theft protection service such as Aura is also recommended. They can keep watch and alert you if something does happen.

  5. Check your accounts regularly. By doing this, you’ll more easily see if something is amiss.

✎ Related: How to Secure Your Bank Account From Hackers? ➔

What to Do If There’s a Breach with Your Bank Account?

Mobile Banking App Scam

Even if you do everything right, there still might be a breach with your bank account. 

That’s why it’s important to monitor your accounts and have a plan in place should this happen. The good news is you can deal with it, and the chance of major losses is minimal if you react correctly.

If your account gets breached or you’re dealing with that right now, follow these steps.

1. Understand the Cause

Your bank account could have gotten breached via several different means, and many (though not all) involve mobile banking. Your information might have been available online. You might have had insufficient security. Your phone might have been stolen or you could be the victim of SIM swapping.

Whatever the cause was, it’s helpful if you find out. You need to know if the threat is still there (you should assume it is unless proven otherwise). You need to know if it was something under your control. And if it was under your control, you should know what you could change.

Note that you might not always be able to determine the exact cause. That’s okay, and there’s no point panicking over what you can’t control. In truth, it may be possible there was nothing you could do, and it’s your bank’s fault.

While reviewing your information, try to compile or write down as much information as you can:

  • When was the breach of your account? Were there multiple attempts?
  • What was taken, if anything? You can assume your information was stolen as a matter of course.
  • If such information was available, from where was the breach attempted or executed?
  • Was the breach committed by someone you know? Identity theft and financial crimes are often committed by someone close to the victim.

Write down as much as possible to adjust your mobile banking habits and expectations later.

2. Inform Your Bank

After getting a basic idea of what is happening, the most important step is to call your bank and report the fraudulent activity. 

You can call their customer service number for this, or they might have a dedicated line for fraud. I assure you that you’ll eventually talk to the right person by calling them.

This will not be their first time, and there will be a clear procedure they will walk you through. If you call in time (within 60 days, usually), you will not be liable for most of the fraud, if any.

As part of the call and in line with the next step, a credit freeze, fraud alert, and alert on your account might be implemented.

3. Secure Your Phone 

  1. You will want to remove all malware from your phone. You won’t be able to do this alone without extreme measures (a factory reset), so utilize a trusted antivirus app for your phone. Typically, Android phones have to worry about malware much more than iPhones.
    • When getting an app, get a paid, premium option instead of a free one. The free ones are often not much better than the malware themselves.

  2. If you have passwords and authentication information on your phone, change all that when you can. This might mean changing passwords, using different security questions, activating two-factor authentication differently, and logging out of your accounts or apps.
    • You should regularly check your phone’s security at least every six months and make appropriate changes anyway, so consider this a related step. 

  3. What permissions do your apps have? Are they requesting access to things they shouldn’t? Now is the time to review.

  4. Ensure you use a lock screen with a good PIN or biometric lock on your phone. Note that it won’t take long for a hacker to crack the four-digit PIN on your phone.

  5. If you’re worried about your mobile banking app and don’t trust it, uninstall it. I know it can be inconvenient, but using an app you don’t trust for something so important is more of an issue. Additionally, desktop apps and websites have come a long way.

4. Secure Your Accounts and Information

After securing your phone, you need to secure your bank account, other accounts, and personal information again to the best of your ability.

When securing your accounts, you should change, remove, or make private any relevant information, depending on what’s most relevant to the accounts and how the bank operates. If a bank isn’t as secure as you’d like, now might be a time to consider switching providers.

As mentioned, you should also change your passwords, enable extra security measures like two-factor authentication (if it isn’t mandatory for your account anyway), and set up alerts, at least for now.

Then there’s your information. Unfortunately, if your information is out on the internet (probably the dark web) due to the data breach, you won’t be able to put that cat back in the bag. The best you can do is ensure it isn’t used against you.

That mostly means monitoring for more breaches and identity theft. The good news is that some services can handle this for you. I recommend Aura to monitor for identity theft and help protect your accounts. They can monitor your credit, provide identity theft insurance, and alert you if something seems out of place. Given the breach, it is quite likely criminals will try something.

Finally, depending on how severe the situation is, you may want to put a fraud alert and credit freeze in effect. This can be annoying as applying for credit will be harder, but it will prevent others from doing so.

Conclusion

Mobile banking apps are a wonderful convenience; it’s hard for some people to imagine life without one. However, there are risks and security vulnerabilities compared to more traditional banking. Mobile banking is still a relatively new technology, after all.

You can mostly compensate for these vulnerabilities but must know what to look for and implement better cybersecurity practices. Also, invest in an identity theft protection service such as Aura to help keep you safe should the worst happen with your bank.

Once you take the necessary steps and check to see if there are new threats occasionally, you can enjoy mobile banking with little risk and concern.

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