Security of mobile banking apps is paramount in the financial services landscape. With cutting-edge security features and comprehensive frameworks to avoid data breaches, implementing customized solutions in mobile banking applications is the best way to detect and prevent unauthorized access, as well as combat fraud and cyber threats. 

In this article, we'll take a closer look at the potential risks and methods to improve mobile banking apps security to stay safe and avoid leaking sensitive data from users’ mobile/online banking accounts.   

How Secure are Mobile Banking Apps

When discussing mobile device applications that allow transfer money, pay bills, deposit checks, and track spending, the question of “how secure is mobile banking?” remains relevant. The good news is that such mobile apps are usually completely safe and receive regular security updates, serving as a good alternative to other banking methods.

If you use mobile banking services, these types of applications often have built-in security tools that protect personal information and detect malicious activity, ensuring consumers finances are safe. Most financial companies apply secure technologies such as biometric authentication (fingerprints or facial recognition), secure location, phishing protection, and multi-factor authentication (text messages/verification codes to mobile phones to prove actual users trying to access the account). Additionally, many organizations also apply end-to-end encryption to protect personal information during transmission, especially when using public Wi-Fi

Unlike traditional banking websites, your banking app's security is often more effective in most cases due to added security. Generally, the following methods are most commonly used to protect mobile banking apps against security threats:

  • Encryption. Encryption algorithms mask confidential data and banking information, such as login credentials, account numbers, bank statements.

  • Updates and patches. Mobile banking app security largely depends on how regularly the application receives updates from developers that fix bugs and security vulnerabilities.

  • Biometric/two-factor authentication. Using Touch ID and Face ID features, as well as receiving text messages on mobile phones or generating verification codes in an authenticator app, makes logging into banking applications more secure and significantly minimizes the likelihood that thieves will gain access to your money.

What is the Risk of a Mobile Banking Application?

Although mobile banking risks are lower than logging onto the bank's website, security concerns can still arise. While with websites in mobile browsers, scammers can share links to phishing websites or exploit public Wi-Fi network vulnerabilities to steal your passwords and login credentials, the situation is better with mobile banking apps. However, there are several risks one should keep in mind to protect their accounts, ranging from fake mobile banking apps to vulnerabilities during data transmission between their mobile device and the bank's server.

Most commonly, hackers use the following points to gain access to bank accounts, money, and sensitive information:

  • While the personal information and data is in transit

  • On your mobile device

  • At your bank's server

Let's look at these in more detail:

  • Data hacking. Hackers can log into accounts even without access to mobile phones. This becomes possible through mobile malware software that attacks the bank's app. Most often, consumers can be tricked into downloading malware onto their mobile devices, allowing criminals to spy on them and steal their mobile banking login credentials.

  • Accessing bank account on the device if the phone is lost or stolen. If your mobile device is lost or stolen, this can become a major problem. The issue is that many users may save passwords and login information on their phone, stay logged into sessions (in the bank's app or email), and so on. This gives scammers an opportunity to bypass bank mobile app security. Criminals can reset old passwords using your email to then bypass two-factor authentication and log into the account. The best solution is to not save your passwords and always enable biometric security like fingerprint ID for banking apps.

  • Breaching banking apps. Identity thieves can steal your sensitive information by finding vulnerabilities in the banking app. Besides stealing money, identity theft may then use your personal data on the Dark Web to, for example, open new credit cards, steal your tax refund, or take loans in your name.

When talking about the risk of mobile banking and answering “Is mobile banking safe?”, these are 10 most common concerns to keep in mind when using financial mobile services:

Phishing Links

Scammers can use such links in emails and fake fraud alerts to obtain your sensitive data (logins, passwords). By clicking on such a link, you'll end up on phishing websites that will record your information and account number while imitating your bank's page. Additionally, links in phishing emails may contain malware that allows hackers access to your banking app.

Trojan Overlays

This allows scammers to misdirect your transactions. This type of virus includes malicious code hidden inside, which activates, for example, when you transfer money, changing the recipient's address at the last moment before confirmation.

Check Deposit Scams

The problem with this type of scam is that fake checks look just like real ones. Most often, scammers pretending to be buyers or employers send a check to deposit and then, when everything is done, ask to refund the money or send back some of it.

Keylogging

Such malware usually hides in other apps without raising suspicion and records all the information you type. App stores typically check applications for malware to ensure they're safe. However, many users might download malware-infected apps, for example, by scanning a QR code in public.

Social Engineering

This is an extremely common type of fraud. Criminals use psychological tricks and appeal to urgent action to trick victims into providing their credentials and gain access to their finances. Most often, scammers send text messages or call victims pretending to be their bank, reporting about suspicious transactions or claiming that their accounts have been compromised and may be banned.

SIM Swaps

This method allows criminals to take control of your phone and gain access to your bank accounts. This type of fraud usually involves fraudsters impersonating either you or a mobile carrier employee to transfer your account to their devices, thereby receiving your texts, calls, and other data and bypassing 2FA.

Fake Apps

Fake banking apps work similarly to phishing websites, recording your login credentials, after which the scammer uses them to log into the real bank's app. This is why it's so important to install apps from the device's native app store to ensure you are using a legitimate banking app.

Wi-Fi Hacking

Also known as a man-in-the-middle attack, this type of fraud involves a scammer hacking your network and intercepting your data during transmission. Therefore, you should replace your outdated Wi-Fi routers over the years or connect to mobile networks when logging into a bank app.

Data Breach

In cases of data leaks from bank apps or financial institutions, there's always a risk that your sensitive information will end up on the dark web (such as banking details, account numbers, mobile phone numbers or Social Security numbers).

Stolen Phone

If a phone is lost or stolen and your device isn't locked, fraudsters can gain access to your sensitive accounts and information. Additionally, some criminals can use special software that provides access to accounts, including Apple Pay or Google Pay without unlocking mobile phones.

Ensure the Security of Your Mobile Banking Apps with Custom Solutions from Jappware!

Ways to Safeguard yourself from Mobile Banking Fraud

Here are some tips for mobile banking safety: 

Ignore Unsolicited Calls/Emails

If someone tries to reach out to you claiming to be a bank employee or sends you suspicious links, the best solution is to ignore such text messages or calls. Additionally, never send account details or financial information to anyone since bank employees should already have access to this data and wouldn't ask their consumers for it.

Download Applications from Official App Stores

It's wise to avoid third-party app stores, especially if these are not reputable sources, as there's always a chance such files may contain malware or be fake bank apps. Official stores conduct regular application checks and release security updates which significantly reduces risks. So, never install apps for financial services from unofficial sources. 

Stick to Cellular Network

When logging into financial applications, it's best to switch to mobile networks, especially if you're in a public place. Don’t connect to public Wi-Fi networks during banking app sessions, as public Wi-Fi is prone to numerous potential vulnerabilities. If you have no alternatives, consider using a Virtual Private Network (VPN) for additional security beforehand.

System and Apps Updates

Users should always keep track of updates available for their smartphone’s operating system and financial applications. Updates and patches contain not only new features but also protection against bugs and vulnerabilities.

Avoid Rooted/Jailbroken Devices

Despite the enhanced customization options in rooted or jailbroken versions, such devices are more vulnerable to malware and hacking, making them a bad choice for a banking service.

Use Antivirus Software

Antivirus programs detect and block malware, increasing the security and protection of your devices, and promptly send notifications in case of suspicious activity.

2FA and Strong Passwords

Two-factor authentication and strong passwords are among the best recommendations for customers to guarantee mobile banking safety. Besides complex passwords with uppercase and lowercase letters, as well as special characters, cybersecurity experts recommend enabling biometric ID (fingerprints/facial recognition) on your devices, and logging out of your financial apps after completing the session. Finally, don't forget to enable 2FA in the bank's app. When possible, using an authenticator app like Google Authenticator instead of text SMS is a good solution for a risk-free experience.

What is the Best Security for Online Banking?

Online banking and financial applications security requires a comprehensive approach with an extra layer of protection.

One of the most effective solutions is biometric authentication, which uses facial recognition, fingerprint scanning, and sometimes voice recognition to log into the mobile banking app. These methods can be combined with robust passwords (at least 14 characters long with uppercase/lowercase letters) as part of multi-factor authentication, significantly enhancing security.

Additionally, end-to-end encryption based on modern cryptographic algorithms, including elliptic curve cryptography, is used to protect data during transmission between the bank app and server. Tokenization technology also is helpful, providing the replacement of personal information and sensitive data with unique identifiers (tokens), thereby minimizing the risk of compromise in case of data breaches.

Many companies invest in implementing behavioral analytics systems that track application usage patterns, including activity times, geolocation, devices used, and transactions. Any deviations from normal behavior are automatically flagged as suspicious and may require additional verification from customers.

Financial application developers can also implement proactive protection technologies to ensure a banking app is secure, such as runtime application self-protection (RASP) and code obfuscation to counter malware. Another valuable tool is real-time security monitoring using AI-powered systems for early anomaly detection.

Extra protection can be provided through bug bounty programs, regular tests, and security audits, enabling identification and remediation of vulnerabilities in a timely manner. 

Together, all these measures can create a robust shield against current cyber threats and fraud methods.

All in all, since mobile banking has become an integral part of modern life, providing customers with convenient access to banking services and deposit products, it's crucial for users to remember safety when dealing with bank apps or services:

  • Never click on suspicious links, even if you find them interesting

  • Be wary of unexpected pop-up overlays (especially if they warn about security breaches, viruses, or prizes)

  • Always securely store your login credentials and never write them down in your phone's notes

  • Enable two-factor authentication and avoid using public Wi-Fi networks when accessing your app to keep mobile banking safe

Bottom Line: Use Mobile Banking More Safely with Jappware

At Jappware, a custom mobile banking app development company, we build custom software for online banking and financial applications for different operating systems (iOS/Android phones). Through the implementation of robust measures and protocols, banking apps & solutions become more secure and protected against fraud and cyber threats.

With cutting-edge tools for real-time security monitoring, behavioral analytics, multi-factor authentication, and end-to-end encryption to protect data during transmission, custom mobile banking security software is an ideal investment for financial institutions and startups.

Solutions we can develop for you not only detects and prevents unauthorized access to client accounts but also seamlessly connect to your systems and guarantees regulatory compliance.

With Jappware’s services, you get more than just banking apps or solutions for malware and phishing protection—you gain a long-term partner for the entire journey from launch to subsequent support and scaling!