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Mobile banking security fears

By David McMillin · Bankrate.com
Friday, September 28, 2012
Posted: 12 pm ET

A new survey shows why mobile banking may take some time to catch on: Account holders are afraid.

A report from California-based software security company Metaforic indicates that 68 percent of smartphone users who do not use financial apps are holding back due to security fears. According to Dan Stickel, CEO, Metaforic, those consumers have every reason to be concerned.

The inherent risks of mobile

While account holders may be familiar with the risks of online banking, Stickel says that mobile phones are potentially riskier because users connect to all kinds of networks and Wi-Fi hotspots as they move from location to location.

"Mobile phones are more dangerous due to the physical mobility perspective," Stickel says.

Unfortunately, plenty of users already recognize those dangers. Nineteen percent of respondents in the Metaforic survey indicated that they or someone they knew had been victims of a mobile security breach.

What are banks doing to mitigate those risks?

"In the real world, apps are exposed to viruses, hackers, hardware failures and a wide range of potential risks to the user," Stickel says.

Currently, Stickel says that banks and app developers are not doing enough to protect everyday account holders as those risks continue to rise.

"App providers ship software and expect everyday users to keep them safe," Stickel says. "It's a complete failure even for banks that have sophisticated technology."

"The responsibility should not be on the consumer's shoulders," Stickel adds. "It should be on the people who are building the technology."

What can you do?

Until banks and app developers make significant strides to enhance security, Stickel advises users to take two steps: Only download apps from the official Apple and Android stores, and install mobile anti-virus software on your phone or tablet.

However, even anti-virus software can fail.

"Running mobile anti-virus software is better than nothing, but it's not a guarantee," Stickel says.

If you do use your smartphone to manage your finances, Stickel says it's important to use unique passwords, steer clear of visiting risky Web pages and of course, avoid one of the biggest dangers: losing your phone.

What do you think of mobile banking? Have you resisted downloading a banking app due to security fears?

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