What Is Mobile Banking?
Mobile banking is the act of making financial transactions on a mobile device (cell phone, tablet, etc.). This activity can be as simple as a bank sending fraud or usage activity to a client’s cell phone or as complex as a client paying bills or sending money abroad. Advantages to mobile banking include the ability to bank anywhere and at any time. Disadvantages include security concerns and a limited range of capabilities when compared to banking in person or on a computer.
Understanding Mobile Banking
Mobile banking is very convenient in today’s digital age with many banks offering impressive apps. The ability to deposit a check, to pay for merchandise, to transfer money to a friend or to find an ATM instantly are reasons why people choose to use mobile banking. However, establishing a secure connection before logging into a mobile banking app is important or else a client might risk personal information being compromised.
Mobile Banking and Cybersecurity
Cybersecurity has become increasingly important in many mobile banking operations. Cybersecurity encompasses a wide range of measures taken to keep electronic information private and avoid damage or theft. It is also used to make data is not misused, extending from personal information to complex government systems.
Three main types of cyber attacks can occur. These are:
- Backdoor attacks, in which thieves exploit alternate methods of accessing a system that doesn't require the usual means of authentication. Some systems have backdoors by design; others result from an error.
- Denial-of-service attacks prevent the rightful user from accessing the system. For example, thieves might enter a wrong password enough times that the account is locked.
- The direct-access attack includes bugs and viruses, which gain access to a system and copy its information and/or modify it.
Steps financial advisors can take to protect their clients against cyber attacks include:
- Helping educate clients about the importance of strong, unique passwords (e.g, not reusing the same one for every password-protected site), along with how a password manager like Valt or LastPass can add an extra layer of security.
- Never accessing client data from a public location, and being sure the connection is always private and secure.
Mobile Banking and Remittances
Remittances are funds that an expatriate sends to their country of origin via wire, mail, or mobile banking (online transfer). These peer-to-peer transfers of funds across borders have enormous economic significance for many of the countries that receive them – so much so that the World Bank and the Gates Foundation have set up complex tracking mechanisms. They estimate that remittances to developing countries amounted to $529 billion in 2018, up 9.6% from the previous record high $486 billion recorded in 2017.
FAQs
A mobile banking app continuously requests the bank's server for financial activities like making payments or updating the account balance. If an insecure protocol is used for the data transfer process, users' personal information becomes vulnerable to exploitation by malicious individuals.
What are the disadvantages of mobile money banking? ›
1. Security Concerns: Mobile money services are susceptible to cyberattacks, fraud, and data breaches. Ensuring robust security measures is crucial to protect users' financial data and transactions.
Why is mobile banking easy? ›
Thanks to mobile banking apps, you can manage your money on the go — from depositing checks to managing your cards and creating savings goals — easily and securely. With all these tools right in your app, you can skip the trip to the ATM or the branch and reap the benefits of mobile banking.
How risky is mobile banking? ›
If hackers gain access to your banking information, this puts you at risk of not only financial fraud — but also identity theft. Scammers use stolen personal data on the Dark Web to: Take out loans in your name. Open new credit cards and ruin your credit score.
What is the problem with mobile banking? ›
The two most significant issues with financial and mobile banking apps that users experience are app freezing and a dropped internet connection. Next in line is the inability of apps to display transaction details or to connect with a customer service executive directly.
What is the main problem in online banking? ›
Online banking is at risk of cybersecurity threats that could expose confidential and sensitive financial information of the customer. Hackers use various tactics like phishing attacks, malware, and ransomware to gain unauthorized access to accounts.
What are the obstacles for mobile banking? ›
Top security challenges and risks of mobile banking include: Phishing attacks. Vulnerabilities in conventional authentication methods and systems. Device theft and unauthorized access.
What is the biggest drawback to online banking? ›
Some disadvantages of online banking include:
- No physical branches when you need help.
- Challenging cash deposits.
- No access to foreign currency.
Is mobile banking safer than internet banking? ›
So, is Mobile Banking Safer than Online Banking? Whether you choose mobile banking or online banking, you can be confident that your bank has invested in the security of these services. However, mobile banking is a little safer when it comes to security, mainly because this type of banking does not store any data.
What are the threats of mobile banking? ›
In the realm of mobile banking app security, one of the top threats that users face is the existence of fake banking apps. These malicious applications imitate legitimate mobile banking apps to trick unsuspecting users into divulging their login credentials and sensitive financial information.
The consequences include difficult adoption of fraud risk and anti money laundering (AML) initiatives. This is also often reflected in the maturity of the local regulatory system, which can itself offer loopholes which mobile payment fraud criminals can benefit from.
Why do people prefer mobile banking? ›
Unlike a bank branch, mobile banking conveniently gives you access to your account anytime you like — with some exceptions, such as planned maintenance updates and unexpected outages. This ease of accessibility saves you time.
Which is better, mobile banking or internet banking? ›
The biggest difference between the two is their functionality. Internet Banking allows you to conduct online transactions through your PC or laptop and an internet connection. On the other hand, mobile banking can be done with or without internet. Many banks nowadays have their mobile apps for mobile banking.
Is mobile banking reliable? ›
Mobile banking is generally a safe and convenient way to manage your funds, but there are some cybersecurity risks to be aware of. Those who ask, “Is mobile banking safe?” might wonder how vulnerable banking apps are to various online threats.
What is a limitation of online banking? ›
Online banking does have some potential disadvantages. These include a lack of face-to-face customer support, cash deposit services and a risk of technology failures or security breaches.
What are the limitations of mobile networks? ›
Disadvantages :
- As communication is done through open space, it is less secure.
- Unreliability.
- More open to interference.
- Increased chance of jamming.
- Transmission speed is comparably less.
- it has a limited amount of bandwidth for communication and breaches of network security.
- Wireless networks can be easily hacked.
What are the disadvantages of mobile payments? ›
Mobile payments can be convenient, fast and secure. They can, however, be expensive and still vulnerable to issues with technology. In particular, if there are any issues with the host phone, mobile payments will be unable to work at all.