4 Hot Mobile Banking Security Developments

4 May, 2015 (10:23) | Blog | By: admin

By Joe Stanganelli

Integrated biometrics and specialized mobile banking apps are working in tandem to bring two major benefits to financial institutions and their customers.

Mobile banking is not exactly new anymore, but it is the target of heightened security scrutiny. After all, mobile devices get lost and stolen all the time. It’s one thing to lose the money in your wallet and your easily cancelled credit cards. It’s another thing entirely to lose the device that is a gateway to your banking and investment accounts.

Physical access to your smartphone is not even the entire problem. Anti-malware software is far less prevalent on mobile devices than it is on desktops and laptops.

There’s concern in some quarters that the industry is not quite ready for mobile banking. Yet, mobile banking proponents argue that, between instant push notifications and geolocation tracking, mobile banking allows for customers to monitor fraud in real time alongside their banking institutions.

Combined with newer mobile devices that often are equipped with the latest in biometric and encryption technologies, many of our smartphones may well be more secure than our desktop or laptop computers.

Recent developments are further strengthening the arguments in favor of mobile banking. Integrated biometrics and specialized mobile banking apps are working in tandem to bring two major benefits to financial institutions and their customers alike:

Improved security, and

Improved self-help features so that customers don’t have to call, email, or tweet their bank’s customer care representatives (saving on customer service costs)

Consequently, the latest mobile banking advances allow customers to better secure their money – and even better save and manage their money – in cool, engaging ways. Little wonder, then, that banks are hopping aboard the mobile banking bandwagon – many even offering to alleviate their FUD-stricken customers’ fear with the promise of total coverage of mobile fraud losses.

On the following pages, you’ll see four of the hottest security developments in mobile banking. Click through our gallery of mobile banking security ideas, and decide for yourself how you’d rather conduct your electronic banking – on a computer, or on a smartphone.

You Can Put Your Finger on It

Touch ID, the biometric centerpiece of Apple’s latest smartphones, has found its way into everyday consumer banking. When the Cupertino tech giant released the API for Touch ID, its fingerprint-authentication technology a few months ago, financial services companies pounced.

Charaka Kithulegoda, Tangerine Bank’s CIO, told American Banker that Touch ID provided exactly the technology Tangerine has been waiting 12 years to see. Accordingly, Tangerine has joined numerous other financial institutions, including American Express, BBVA, Citigroup, Discover, JPMorgan Chase, and – as of this past week – the Royal Bank of Scotland in implementing fingerprint authentication for mobile banking services.

Apple is not the only belle at the mobile-banking ball. Westpac New Zealand, for instance, has developed apps for mobile fingerprint scanning on Samsung devices.

Benefits of Touch

Banks love this technology for its convenience; it has potential for allowing customers to reset their password without having to take up call center time and resources – and may even replace passwords altogether someday. But for those worried about the security of Apple Touch ID (which has already been shown to be hackable), there are other mobile biometrics that banks are exploring as well, including images of eyes.

The Eyes Have It

Imagine logging in to your bank account by taking an eyeball selfie. That’s exactly the promise of Eyeprint ID – a mobile security technology introduced by biometrics firm EyeVerify in 2013. Unlike iris scanning (which, according to EyeVerify, is more expensive and requires specialized hardware), Eyeprint ID uses basic smartphone cameras to scan the unique map of blood vessels in the whites of the user’s eyes. (We don’t recommend using this after a hard night of drinking.)

Digital Insight, a tech firm with more than 800 financial institution customers, helps banks experiment with applications for Touch ID and other biometrics. It announced earlier this month that it has agreed to incorporate Eyeprint ID into its mobile banking platforms starting this spring. Other companies internationally also use Eyeprint ID in their mobile banking apps, and Wells Fargo – one of EyeVerify’s major investors – began using the technology last year.

Benefits of Eye Scanning

Our eyes are not only the windows to our souls … they’ll someday be the windows to our bank accounts. Now that every smartphone comes equipped with a camera of a fairly high resolution, making use of eye-scanning applications is quite feasible for financial institutions. As with fingerprinting, it’s a way to provide multi-factor authentication for all mobile banking customers.

Banks Lend Voice to Better Security

Voice assistance has long been available for mobile banking apps. USAA rolled out its “Virtual Mobile Assistant” for iPhone users two years ago, and E-Trade Financial introduced voice recognition into its mobile apps the year before that.

Now, financial institutions such as Wells Fargo, Barclays, and US Bank are experimenting with voice print authentication – a security technology that looks especially promising. Nuance Communications – US Bank’s voice biometric vendor – reports that 35 million people presently use its technology and are able to log in successfully at least 95% of the time (background noise being the No. 1 reason for unsuccessful voice logins).

The Benefits Of Voice Recognition

The benefit for financial institutions is the promise of improving and simplifying security and usability. Like other biometrics, voice-based authentication does not require the customer to remember a complex password (or, worse, use an easy-to-guess password to better facilitate memorization). Additionally, voice biometrics improve accessibility, sparing people with disabilities the difficulty of tapping in a password.

Voice prints aren’t the only “simple” mobile security tool on our list…

Personal Finance Management

There’s more to mobile banking security than how we log in. Sometimes, a customer loses a bankcard. Or a questionable purchase appears on a customer’s statement. Or – if we broaden our definition of security a bit – there is a danger that a customer will overspend thanks to the ease of use that mobile banking provides.

For these situations, personal finance management (PFM) apps come to the rescue.

PFM apps were traditionally boring and difficult for financial institutions to make work for their bottom lines. Then, MoneyDesktop, a Utah-based PFM vendor, began attracting a lot of attention a few years ago with its sleek PFM app for iOS, MoneyMobile. In addition to keeping track of personal finances, MoneyMobile allows customers to easily verify purchases with joint account holders – keeping bank call centers clear of frivolous inquiries. (“Honey, what’s this $2,000 charge from Bloomingdale’s?”)

Simple, another PFM app, offers this same feature with the added capability of taking and sending pictures of their purchases if needed for future clarification or memory refreshment. Additionally, Simple allows customers to protect their accounts by blocking a missing debit card (and unblocking it later if the customer eventually finds the missing card) – again, saving call center resources. Finally, Simple offers a “Safe-to-Spend” feature that tells customers if they can afford a particular item – helping to avoid those $35 overdraft fees that cost banks good will.

Benefits of Personal Finance Management

Offering PFM to your customers for use on their mobile devices isn’t just about good security. It’s also about good customer service. Banking brands can use these tools to promote fiscal responsibility for their customers that can lead to improved saving habits. In short, these tools are like money in the bank.

In conclusion…

Fingers, eyeballs, voice and, of course, an app to help us manage our spending … these are all part of the growing wave of mobile banking that IT organizations in financial services companies will want to consider in the near future. As our precious customer information becomes increasingly valuable to cyber-criminals, the mobile device may will be our best defense – as long as we implement the tools and services that protect our customers.

Joe Stanganelli is founder and principal of Beacon Hill Law, a Boston-based general practice law firm. His expertise on legal topics has been sought for several major publications, including US News and World Report and Personal Real Estate Investor Magazine.

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