Mobile banking has made money management far easier than it used to be. Most of us have the ability to deposit checks, make transfers, pay bills, and more—all from the palm of your hand. While mobile apps are convenient, it’s undeniable that there are safety concerns. Every mobile user should know the basics to protect themselves while making financial transactions on a phone or tablet.
At Leaders Credit Union, we want our members to have the tools and information they need to turn their financial dreams into realities. That includes understanding mobile banking safety features and how they protect users against financial fraud, identity theft, and malware. Here are nine mobile banking safety features you should know about.
What Are the Security Risks of Mobile Banking?
There are some significant risks that are out there if you use mobile banking:
- Phishing. Phishing involves someone sending a link that convinces the recipient to enter their account ID and password, or redirects them to a decoy site.
- Identity theft. Identity theft occurs when someone steals your personal information, including things like your address, Social Security Number, and other personal information.
- Financial fraud. Financial fraud can take many forms. Some examples include sending texts to get you to confirm transfers or advising you of fraud that didn’t occur, all with the goal of getting you to send your money to a bad actor.
- Weak passwords. Weak passwords can put your banking information and money at risk. It’s important to create strong passwords that incorporate upper and lower case letters, numbers, and special characters.
- Not taking advantage of security alerts. Most credit unions and banks allow account holders to sign up for security and fraud alerts. Not taking advantage of this option may put your account at risk.
- Public Wi-Fi. Using your mobile banking app in a public space where you connect to public Wi-Fi constitutes a significant risk. There’s a possibility that other people on the network can access your information without your permission.
The security risks of mobile banking all come down to one thing: people using security loopholes and shortfalls to get their hands on your money. Staying informed about the risks and what you can do to protect yourself is the best way to keep your money safe.
9 Mobile Banking Features That Keep Mobile Banking Apps Secure
While there’s always a risk involved in mobile banking, there are plenty of safety features that can protect you and your money. Here are nine to look for in your mobile banking app.
#1: Multi-Factor Authentication
Multi-factor authentication, sometimes called two-factor authentication or 2FA, is a system that provides an additional layer of protection on top of your mobile banking password. The two most common options are as follows:
- Fingerprint or FaceID authentication. With fingerprint or FaceID authentication, you scan your fingerprint or FaceID and use that as a way to unlock your mobile banking account. This option protects you by making it impossible for anybody to steal your phone and access your account.
- Code authentication. With code authentication, your financial institution texts you a code that you must enter in the app to access your account. The code lasts for a limited time, after which you’ll need to request a new code.
With multi-factor authentication, you’re protected even if someone learns your password, because they won’t be able to provide a fingerprint, scan your face, or enter a code that is sent directly to you.
#2: Password Dictionaries
Most credit unions and banks require strong passwords for their mobile apps. A strong password typically incorporates a combination of uppercase and lowercase letters, numbers, and special characters to make the password difficult to guess.
Password dictionaries offer another layer of security by eliminating certain common letter or number sequences from passwords. An example might be the numerical sequence ‘123’ or the word ‘password.’ Since people often choose easy-to-guess passwords, putting a password dictionary in place can protect people from themselves by requiring them to choose passwords that are secure and less likely to allow a criminal to guess what they are.
#3: End-to-End Encryption
End-to-end encryption (E2EE) is a feature that protects your personal information when it travels between your mobile device and a server at your financial institution. Without encryption, data may be vulnerable and there’s the potential that someone could steal your personal data while it’s in transit.
Using end-to-end encryption makes it so that only two parties—the sender and the recipient—can read the information being sent. It may be used for transactions and messages. If a bad actor were to get a hold of a message, they would not be able to read it without breaking the encryption, something that could take a long time.
#4: Real-Time Text and Push Notifications
As mentioned above, every mobile banking user should sign up for real-time text and push notifications. These notifications provide a way for you to be informed of suspicious account activity as soon as it occurs, giving you the opportunity to notify your financial institution.
You should be able to opt into real-time text and push notifications directly from your mobile app. You may also have the option to specify when you want to receive notifications. For example, you might decide to get a notification of any transaction over $100.
#5: User Behavior Analysis
Most people who use mobile banking have had the experience of getting a notification of something going on with their account. Often, these notifications occur when the account holder engages in unusual activity that is identified by an algorithm.
An example might be someone who does most of their shopping online, getting groceries delivered and ordering from Amazon. A large transaction at a brick-and-mortar store might trigger a notification. While these notifications may be alarming to receive, they are a necessary element of mobile banking safety.
#6: Safe Digitized Documentation (SDD)
There are some financial transactions that still require a signature, yet storing a signature in your mobile app can be risky without the proper security. Many financial institutions now include safe, digitized documentation as one of their security features.
SDD allows users to set up a secure electronic signature that can be used in multiple ways, including in eCommerce, retail branches, and call centers. With a secure digital signature, you can protect yourself while also reaping the rewards of convenience in the event you need to provide a signature.
#7: QR Code Payments and Verifications
Consumers are now accustomed to scanning QR codes to make payments and access websites. Increasingly, mobile banking apps allow users to scan codes to make purchases.
The ability to scan QR codes within your mobile banking app adds an additional layer of security for microtransactions. In theory, QR codes may also be used as verification of payment or as proof of payment when attending events.
#8: Contactless Payment
Contactless payment is more secure than swiping a card because it uses a different technology that is more difficult to counterfeit. When you swipe a card, the magnetic stripe on the back of your card is read by the merchant's payment terminal, and this stripe contains all of your credit card information. This information can be easily stolen, however, with contactless payments, when you tap your card on a payment terminal, it sends a request for payment information to your card. Your card then generates a one-time code that is used to complete the transaction. This code is different for every transaction, so it is very difficult for criminals to counterfeit.
Contactless payments are also more convenient because you can simply tap your card on the payment terminal and your payment will be processed in seconds. Contactless payments are a secure and convenient way to pay for goods and services. If your card has a contactless chip, you should start using it today.
#9: Card Lock/Unlock
One of the most useful mobile features that financial institutions offer is the ability to lock or unlock a card directly from your phone. Having this option makes it easy to prevent fraud or theft.
If you can’t find your card or see a suspicious transaction, you can log into your app and lock the card until further notice. Doing so makes it impossible for anybody else to use your card. You can always unlock it later—or you can keep the lock in place until you can call to report the fraud and get a new card.
Tips to Protect Your Money While Using a Mobile Banking App
Here are a few safety tips to help you protect your money. Even if your credit union or bank has an app with robust security features, there are still some common-sense measures you should take to be safe:
- Download your mobile banking app directly from your financial institution’s website. This step will protect you from downloading a look-alike app.
- Choose a strong password (and don’t store the password on your phone).
- Opt into multi-factor authentication.
- Don’t use your mobile banking app on a public or unsecured Wi-Fi network.
- Don’t loan your phone to anybody you don’t know and trust.
- Lock your phone when you aren’t using it.
- Be suspicious of any link asking you to enter your account information. If you’re unsure about the authenticity of a link, don’t click it. Instead, navigate to your financial institution’s website or app and enter your password there. You can then check your account without worrying that you’ve clicked on a phishing link.
- If you see any suspicious activity, lock your card. You should be able to do this from a card control mobile app.
Taking these precautions will minimize the risk that anybody will be able to access your personal banking information and take your money.
Protect Your Money with Leaders Credit Union
Protecting your money is essential. While we would all prefer to live in a world where mobile banking was secure all the time, we don’t—and it’s important to choose a financial institution that puts safety features in place to protect you. The nine mobile banking features we have listed here will give you the security you need.
Are you looking to take advantage of mobile banking, but not sure how to get started? Our online banking quick start kit makes the process easy so you can start managing your money in the palm of your hand.
