Attention members of the banking industry: Consider yourselves warned.
While there have been plenty of studies that reveal mobile banking security issues, one source every bank listens to is weighing in on the conversation. The Federal Deposit Insurance Corp.'s latest round of Supervisory Insights includes a section dedicated to the risks and rewards of mobile banking.
In an era where we're seeing these innovations pop up everywhere, it's good to see the FDIC delivering advice on what's sure to be an ongoing challenge for banks. The corporation's report highlights the fact that security must improve in order for the industry to continue to push account holders toward using their smartphones for money management.
Although use of mobile banking services continues to grow, the rate of increase slowed during the past two years due in part to consumer concerns about security.
From the lack of encryption for SMS, or text, message banking to data transmission security for Web and app-based banking and more, the report provides a fairly comprehensive view of the hurdles banks must climb. In addition to offering steps banks themselves can take, the report advises financial institutions to educate account holders on ways to keep their information secure including:
- Avoiding public wireless networks for banking activities.
- Running security software on mobile devices.
- Protecting devices with strong passwords.
My co-bloggers and I have discussed mobile banking regularly, and I'm curious if executives at banks will take the report to heart. Because smartphone adoption continues to explode, there is a steady race to develop the latest and greatest tools in order to attract new customers. When I spoke with Andrew Hoog, chief investigative officer at viaForensics, he indicated that the race often makes user functionality outpace user security.
What do you think? Will the banking industry be able to outsmart potential identity thieves prowling Wi-Fi networks?