Mobile banking is becoming increasingly popular, but is it safe to be able to access so much important information on a small device such as a smartphone that might easily be lost or stolen?
According to a Juniper Research study, "Mobile Banking Strategies: Applications, Opportunities & Markets 2010-15," the number of mobile subscribers who use their phones for banking will exceed 400 million worldwide by 2013. The study also found that more than 80 percent of banks currently offer some form of mobile banking and demand for on-the-go bank balance information and alerts will boost SMS messaging growth.
The case for mobile banking
There are a lot of good reasons why mobile banking is becoming so popular. Checking your balance instantly from your phone can save you in overdraft fees. Text alerts tell you when your credit card bill is due or when there's been unusual activity in your account. If you need to transfer funds from a saving account to a checking account, you can do it from virtually anywhere. It's even possible to deposit checks and swipe your phone as a credit card. Mobile banking offers instantaneous information and convenience that can't be beat.
If you're worried about security threats from using your smartphone to conduct banking, you're not alone. Financial services market research company Javelin Strategy and Research conducted a study in 2008 that found the following:
- 73 percent of consumers worry that hackers can remotely access their phones
- 68 percent fear that sensitive mobile banking information can be stolen using a wireless signal, despite encryption
- 54 percent are concerned that their mobile phones could be stolen
But consumers who are on the fence about mobile banking or worry about its safety should take comfort in knowing that financial industry invests heavily in security technology. For instance, data transmitted between a server and a mobile device is encrypted, same as it is with online banking on a computer. In addition, many banks and credit card companies pledge to foot the bill for any losses from mobile fraud.
Safer mobile banking
Even still, there are steps that you can take to make mobile banking even more secure, such as:
- When your phone is turned on or awakened from "sleep" mode, set a password that must be entered in order to unlock the phone.
- Turn off any settings that automatically enter your password on banking sites and applications. If you don't have to enter your password to access your checking account, neither will a thief.
- Don't store sensitive information, such as account numbers and passwords, on your smartphone.
- Make sure to log out of any banking applications or websites as soon as you're finished.
Finally, if your phone is lost or stolen, be sure to contact your bank and mobile service provider immediately. It's the best way to make sure the issue is resolved as quickly and painlessly as possible.