By: Joe Gillen
Industry experts note that mobile platforms will continue to advance and become more sophisticated in the coming years as consumer demand increases. While offering mobile banking applications may help boost customer retention and acquisition, it will become imperative for financial institutions to also invest in new security systems and technologies to lower the risk of fraud and hacking.
A new report issued by Bank Systems and Technology found that the potential for cyber fraud and identity theft is one of the prime challenges facing banks, and employing mobile banking strategies that center on security may help ease customers' and members' fears and promote greater adoption. The report found that the increase of mobile commerce also raises the risk of phone-based fraudulent communications, such as text message scams and security and accessibility issues.
Helping protect customers, members from cyber crime
Community banks and credit unions have a responsibility to inform their customers and members about the risks of mobile banking. However, institutions are treading carefully to educate their customers without frightening them away from the benefits and convenience that mobile banking has to offer. Financial institutions can take a measured approach by providing pamphlets and disclosures that outline the simple methods consumers can take to protect themselves while accessing mobile platforms.
For example, discouraging them from connecting to public WiFi services is a simple and effective way to thwart potential fraud attacks. Banks should also caution customers against clicking on suspicious messages and text messages from unknown senders. May scammers operate by posing as financial institutions and requesting that customers input personal financial data through their mobile device before fully logging in. Informing customers that banks will never ask for personal information before they are fully logged in to the banking website - and that mobile devices will require several authentication methods - can help consumers avoid scams. Banks should also provide customers with a list of text messages they may send via a mobile device - such as a balance notification or alert that a balance has been paid - and types of correspondence they will never send via a mobile device.
In addition to informing customers about the best ways to protect themselves, financial institutions should also explain the security measures they have taken to safeguard customer accounts. This may include encrypting data sent over the network and offering several methods of password authentication.