Given the rampant cyber threats, people wonder, “is mobile banking safe?” Ensuring data security has become critical for most companies. According to CSO Online, there is a 28% chance that companies will experience a data breach within the next two years.
Due to the scale and intensity of cyber attacks on mobile and web applications, financial institutions must take extraordinary precautions to manage the risks of mobile banking and ensure mobile banking security.
Why are banking apps vulnerable?
The architecture of the mobile banking app is the root of its vulnerability to breaches and cyberattacks. An online mobile banking app is software that connects directly to the bank’s backend and system via an application programming interface (API). APIs run on open-source code and aid app developers, but they may introduce security vulnerabilities in mobile banking applications.
Cyber attackers can exploit this flaw in machine-to-machine interaction by creating their shadow APIs. Incidentally, these shadowy APIs do not appear as compromised endpoints, allowing attackers to appear as approved users and access the network by bypassing network filters that can’t identify these attackers as intruders.
A second factor is the ownership of a banking app. Three parties have joint rights to a banking app. For instance, a Line of Business (LOB) manager often defines software requirements, while the development team is primarily responsible for creating it and the IT operation team manages its deployment.
From a cyber security perspective, the complex ownership model creates *mobile banking app security issues.
The third factor is the improper use of mobile platforms. Although mobile operating systems like iOS and Android provide unique security features like Touch ID or permission systems, improper use of these systems leaves users vulnerable to the theft of their data by hackers.
The fourth reason mobile apps are vulnerable is the lack of secure data storage. All apps require internal or external space to store user data. That space storage must be very safe for sensitive data to be held on it to prevent leaks. Any failure or negligence to secure that storage leaves it vulnerable to cyber-attacks.
A fifth factor contributing to the vulnerability of mobile banking apps is faulty communication.
While there is a need for communication between mobile apps and external data devices such as Bluetooth and others, this can create a vulnerability a connection occurs between the mobile app and the external data source, with data leaks occurring in the process.
Common Types of Fintech Cyber Attacks
The following are examples of common cyberattacks on banking networks:
DDoS (Direct Denial of Services)
This kind of cyberattack typically involves overwhelming the system with flood data. It can impact services by disrupting the uptime and downtime of network services.
Ransomware
This type of cyberattack or piracy locks down databases and systems and demands a ransom to unlock them.
Phishing
This attack, which typically occurs online through SMS, aims to steal login details to allow the attacker to hijack customers’ accounts.
What can financial institutions do for app security?
Implementing multi-factor authentication
This authentication requires forms of identification such as a generated one-time password or barometric authentication like fingerprints, which creates a more secure multi-layer authentication.
Use of an NFC-embedded SIM card by customers
Its use eliminates customers’ need for physical carrying or swiping of cards, thus reducing the risk of data leaks.
End-to-end encryption
How secure are banking apps? Very vulnerable. Ensures data’s safe use by conducting security attrition and audit tests to strengthen the network’s security levels.
Real-time text and email alerts
Interacting in real-time with customers via emails or texts regarding the status of their accounts reduces or eliminates cyber breaches.
Key Risk Factors and Resolution Strategies
Inappropriate platform usage
Resolution Strategies:
Rigorously study the iOS and Android documentation to determine what security practices apply to its server-side operations and mobile interface in every instance and follow them accordingly.
Vulnerable data storage
Resolution Strategies:
In the case of an iOS platform, it’s best to deliberately use vulnerable mobile apps like iGoat to dictate vulnerabilities in the app and development frameworks.
Vulnerable communication
Resolution Strategies:
Use robust encryption algorithms, quality authentication, and SSL protocol to encrypt all communications.
Vulnerable authentication
Resolution Strategies:
Apply these two tips. First, add server-side authentication as an alternative, and second, verify the users’ passwords are not stored on the device by the app.
Inadequate cryptography
Resolution Strategies:
Developers should use only algorithms that have proven their strength after thorough testing.
Vulnerable authorization
Resolution Strategies:
Enforced permissions and roles on the mobile device to stop insecure authorization should be considered unreliable.
Flawed code quality
Resolution Strategies:
Establishing standard practices for all development team members and simplifying the adaptation process for new ones requires keeping all documentation.
Conclusion
Indeed, mobile apps and online platforms have simplified processes of microservices in banking and financial services. However, the risk of hackers compromising the system is significantly high, resulting in a security breach.
So, to manage the risks of a cyber attack on its app, microservices in banking and financial services banks should implement the strategies outlined in this article. It will resolve online banking security issues.
