The Risks of Mobile and Online Banking

posted 2/29/2012 in General

It may seem like a life time ago when we were without smartphones and social media, but the truth is these technologies are still relatively new and pose new risks. Most of us are blinded by the ease of use and convenience of these services that we often overlook these risks. But as we become more confident in posting confidential information and more of use adapt smart phones we become more and more at risk or online fraud.

This can be seen in a recent study conducted by Javelin (a market research firm) that showed the number of fraud and identity theft incidents rising over the past few years. The increased amount of identity theft shows that the threat from online fraudsters is greater than ever. On the bright side the same study showed that the average cost per incident has been decreasing. This can be attributed to the increased security functions put in place by financial institutions such as being able to check your accounts with mobile devices and the ability to set advance alerts directed to your mobile devices. In order to reduce risk consumers should research these functions and take advantage of them when available. 

Frequently checking your online accounts along with activating alerts that are sent to your mobile device are two great ways to help reduce your risk, but it won't completely eliminate your risk. You may also consider cleaning up your social media presence.

·         Adjust the security settings of you're social media account to only share with those you want to.
·         Do not post personal information online, everything can be used by fraudsters.
o   Birthdays with months and years.
o   The name of your high school.
o   Email addresses.
o   Phone numbers and addresses.

Bank risk executives are expecting mobile banking to create the next big wave of financial services fraud. To help protect yourself from threats consider these following tips.

·         Start using a security password to protect your phone.
·         Do not save passwords on your phone.
·         Regularly update your applications, often these include security updates.

Businesses that utilize online banking also need to be aware of these online threats since they have a lot more money and facilities to get money out, like payroll and wires and near real-time wires and more ACH functionality.
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