The world has gone digital, and with it, more people are turning to mobile banking apps to manage their finances. While these apps are convenient and easy to use, they also have a hidden risk: security vulnerabilities. According to the 2021 State of Mobile Finance App Security report from Intertrust, 77% of mobile banking apps have at least one security vulnerability that could lead to your personal data being leaked or stolen.
Mobile banking apps are useful tools for managing our finances on-the-go. However, there are risks associated with using them due to potential security vulnerabilities and malicious actors trying to gain access to our data and funds through phishing campaigns and malicious software such as keyloggers and overlays. In this blog post, we will discuss the various risks associated with mobile banking apps and how you can keep yourself safe while using them.
How Scammers Can Access Your Mobile Banking App
Phishing emails or texts
The most common way scammers try to access your mobile banking app is through phishing emails or texts that look like they’re from your bank or a financial institution. These emails contain links that take you to a fake website where you’re asked to enter your login credentials and other personal information. If scammers can’t access your mobile banking app directly, they may try to trick you into using a fraudulent app. Fraudulent apps usually look identical to legitimate ones but are designed to steal your money when you make financial transactions through them.
Authentication data theft
Additionally, scammers can access your account if you lose or give away information such as usernames, passwords, PIN numbers and other security codes. It’s important to keep security software up-to-date on all devices used for online banking in order to help detect malicious activity early. Finally, never store confidential data such as usernames and passwords inside the same device that is used for online banking activities – always use secure storage solutions instead.
Keylogging Malware in Other Apps
Another concern that cybersecurity experts have discovered are that malicious actors have created “keylogging”, which is malware that is hidden in other seemingly harmless apps. This malware can capture keystrokes while the user is entering their login credentials into their mobile banking app and then send this information back to the hacker who created it. This type of malware can also be used for “overlaying” attacks where it displays additional fields on top of the legitimate login page for the user’s username, password, or other sensitive information. If users enter their credentials into these fake fields, their data can be easily stolen by the attacker without them knowing it.
Man-in-the-Middle Attacks
Man-in-the-middle (MitM) attacks occur when a malicious actor intercepts communication between your mobile device and your bank’s server. This could happen over unsecured networks, allowing attackers to steal sensitive information like credentials and transactional data. MitM attacks are particularly dangerous, because they can go undetected by the device owner.
For instance:
- While using public Wi-Fi at a coffee shop, a hacker intercepts your banking app traffic and captures your login credentials.
- A scammer sets up a fake Wi-Fi hotspot named “SecureBank_FreeWiFi”. When you connect, they monitor all your activity, stealing sensitive data like session tokens and personal information.
SIM Swapping and Phone Theft
Scammers may exploit SIM swapping, where they trick your mobile carrier into transferring your phone number to a new SIM card. This allows them to receive two-factor (2FA) codes and reset your banking credentials.
Examples include:
- A scammer calls your mobile carrier pretending to be you and convinces them to issue a new SIM card for your phone number. Once they have control, they intercept 2FA codes and reset your banking credentials.
- Your phone is stolen, and if it isn’t secured with biometrics or a strong password, the thief can access your banking app and reset credentials to make unauthorized transactions.
Unsecured Wi-Fi Networks
Public Wi-Fi networks are notoriously insecure, making them a prime target for cybercriminals. When you connect to an open network, attackers can eavesdrop on your activity, potentially capturing login credentials or other sensitive data. Mobile banking activities over public Wi-Fi significantly increase your risk of exposure to cyber threats.
Common scenarios include:
- Connecting to an open network at an airport or hotel allows attackers to eavesdrop on your activity, including banking transactions.
- A hacker uses packet-sniffing tools to capture sensitive information, such as login details or unencrypted data, while you’re connected to an unsecured network.
Outdated App Versions and Software Vulnerabilities
Running outdated versions of your banking app or operating systems (OS) can leave your device exposed to security flaws. Attackers exploit these vulnerabilities to gain unauthorized access to personal and financial information.
Examples include:
- You skip a banking app update, unaware that it includes critical security fixes. Attackers exploit this vulnerability to gain access to your data.
- Your device runs an outdated operating system, making it easier for malware to bypass outdated security protocols and access sensitive information.
By understanding these real-world tactics and staying vigilant, you can better protect your mobile banking experience and safeguard your financial information.
Tips on Mitigating Your Risk
Protective Measures for Consumers to Reduce Mobile Banking Risks
For the consumer, protect yourself while using mobile banking services, make sure you only use official bank-approved versions of the app and never click on suspicious links in emails or texts that appear to be from your bank or any other financial institution. Consumers should always:
- Use Strong Passwords and Two-Factor Authentication: Choose unique, complex passwords and enable 2FA for an added layer of security. Never share your login details with anyone, even if they claim to represent your bank.
- Verify Emails and Text Messages Directly with the Bank: Never click on suspicious links, and only download apps from official app stores.
- Avoid Using Public Wi-Fi for Financial Transactions: Always use a secure, private network or vetted virtual private network (VPN) when accessing banking services.
- Regularly Update Banking Apps and Device Software: Keep your apps and mobile devices updated to ensure you’re protected against the latest security vulnerabilities.
- Monitor Account Activity and Set Up Notifications: Regularly check your account for unauthorized transactions and enable notifications to enable you in real time via your mobile device or SMS.
- Only Download Apps From Trusted App Sources: Ensure you download banking apps directly from your bank’s website to avoid fraudulent copies with malware embedded in them. Avoid apps requesting permissions they don’t need.
Essential Banking App Security Practices for Institutions
For DevOps teams and banking institutions, seamlessly integrating mobile application security testing into your development workflow is critical to ensure compliance and protect your users—without compromising speed.
Comprehensive Testing Techniques:
- Utilizes SAST (Static Application Security Testing), DAST (Dynamic Application Security Testing), IAST (Interactive Application Security Testing), and forced path execution to identify vulnerabilities in code, libraries, and dependencies.
- Real-World Vulnerability Simulation: Simulates custom user journeys to uncover threats and provide actionable insights to enhance application security.
- Compliance Support: Built-in support for key standards, including OWASP, GDPR, and NIAP, to simplify compliance and keep your organization audit-ready.
- Software Bill of Materials (SBOM) Validation: Ensures transparency by validating SBOM and scanning for vulnerabilities in libraries and nested dependencies through Software Composition Analysis (SCA).
The Future of Mobile Banking Security
Trends in AI-Driven Security Alerts and Real-Time Monitoring
AI is playing a pivotal role in addressing one of the most pressing threats in mobile banking security: malware. Banking Trojans, such as Emotet, are designed to infiltrate devices and steal sensitive information by mimicking legitimate apps or injecting malicious code into transactions.
AI-powered systems enhance security with algorithms that use:
- Malware Signature Mapping: AI can detect known threats by identifying specific behavioral patterns or code signatures associated with malware.
- Anomaly Detection: Machine learning algorithms analyze vast amounts of user data to spot deviations from normal behavior, such as unauthorized access attempts or unusual app activity.
- Dynamic Threat Response: AI-driven systems can adapt in real time to new, evolving threats, even identifying previously unknown malware strains through behavior-based analysis.
The Role of Blockchain in Securing Transactions
Blockchain offers a decentralized and transparent approach to securing financial transactions. Unlike traditional systems, where data is stored on centralized servers, blockchain distributes information across a network, making it more resistant to tampering.
Key benefits include:
- Immutability: Once recorded, transactions cannot be altered, ensuring accuracy and accountability.
- Decentralization: Reduces reliance on a single point of failure, lowering the risk of large-scale breaches.
- Enhanced Trust: Built-in cryptographic protections ensure that data remains secure and verifiable.
Expected Advances in User Authentication
Advancements in authentication methods are poised to reshape how users interact with mobile banking apps, prioritizing security and convenience. Banks are now turning to a wider set of alternatives for all digital transactions.
Emerging technologies include:
- Behavioral Analytics: Authentication based on how a person types, swipes, or holds their device, adding an invisible layer of protection without disrupting the user experience.
- Multi-Factor Biometrics: Combining facial recognition, fingerprint scanning, or voice identification to strengthen identity verification.
- Continuous Authentication: Systems that monitor user behavior throughout a session, providing ongoing security without repeated login prompts.
While the industry is seeing innovations that dramatically improve security and user experiences, hackers are innovating too. Staying ahead of malicious actors is a never-ending journey.
Going Forward
Recap of Key Risks and Protective Measures for Consumers and Banks
Mobile banking apps have revolutionized financial management, but they also come with inherent risks. Key threats include phishing attacks, malware such as banking Trojans and keyloggers, SIM swapping, and vulnerabilities from outdated app versions or unsecured networks. These risks affect both consumers and financial institutions.
To mitigate these threats:
- For Consumers: Use strong passwords, enable two-factor authentication, avoid public Wi-Fi for transactions, and regularly update apps and device software. Monitor account activity closely and only download apps from trusted sources.
- For Financial Institutions: Implement advanced application security testing, leverage AI for real-time threat detection, and adopt blockchain technology for transaction security. Educate users about best practices and maintain rigorous app update protocols.
Final Thoughts on Building a Secure Mobile Banking Environment
Creating a secure mobile banking ecosystem requires a proactive and collaborative approach. Consumers must remain vigilant and informed about potential threats, while financial institutions need to prioritize comprehensive security measures and continuous improvement.
As emerging technologies like AI, blockchain, and behavioral biometrics evolve, they offer promising solutions to enhance security and user experience. By combining these tools with user education and robust policies, we can foster a future where mobile banking is not only convenient but also highly secure for everyone.
Quokka has solutions that provide deep analysis and visibility required to stay ahead of mobile threats. Q-mast embeds security directly into your workflow to prevent users from being exposed to risks posed by insecure apps. From code to supply chain, it performs comprehensive testing to pinpoint vulnerabilities early and ensure secure app releases from the start.
By leveraging tools like Q-mast and following these tips, financial institutions can maintain a strong security posture, provide peace of mind to their users, and lead the way in building a resilient mobile banking environment.
View our Guide: Mobile Application Security Best Practices for Fintech Apps to learn more.
