Personal Finance

Security Risks of Mobile Banking

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Hail the Gods of Ever More Convenience, but Alas, Beware the Demons of Ever Less Security

So there I was, watching TV the other night and suddenly this provocative bank commercial came on. Imagine that… a provocative TV ad for a financial institution.

A man and a woman are giggling and talking excitedly about something they have been waiting to do the entire day. The camera pans slowly, erotically, up the fluffy carpet past a couple of unceremoniously deposited shoes and various articles of clothing strewn haphazardly about the room and comes to focus on a couple on the bed. We voyeuristically watch as she takes a picture of the front and back of a check with her smart phone, electronically sends the image to her bank, and Voila! She has officially deposited her paycheck.

Hail the Gods of ever more convenience! But alas, beware the Demons of ever less security.

It’s not enough that Google, Facebook, MySpace, Twitter, Foursquare, Blippy and their progeny inspire us ever more aggressively into privacy oblivion, the mobile deposit environment could well offer hackers yet another conduit to intercept account and routing numbers, names and addresses and check images (for replication) in real time no less.

Banks would have us believe that they are obsessive protectors of our personal identifying information. Dangling us over yet another cyber-precipice, singing the siren’s song of convenience, they tell us we are secure, but never truly help us understand either the precautions they are presumably taking to protect us or the precautions we should be taking to protect ourselves.

It comes as no secret that financial service institutions, in the midst of a fee depression brought on by financial regulatory reform and the Credit Card Reform Act, are developing new and ingenious ways to enlarge consumer footprints and encourage us to do more with them, as they seek new and ingenious ways to do more to us.

“The strategy is convenience,” said one bank executive to an ecommerce publication. “We offer a safe and secure way to make a deposit so that our customers can spend time doing the things they want to do.”

I wonder if – in pursuit of convenience – the above quoted bank executive would feel comfortable depositing her mother’s check using this app? Is she absolutely sure it’s safe and secure? Has she ever considered the concept of “identity theft”?

Phones can be improperly accessed, messages intercepted, searches diverted to dangerous clone sites and they can be lost or stolen. Phones save the photos they take, which leaves consumers walking around with the digital equivalent of signed checks in their pockets. Also, these apps automatically save all the data you send, unless you go in and change the settings yourself. Most people don’t even understand how to change the settings themselves. Even worse, some apps automatically log onto your bank account the minute you go online.

Most consumers have the misconception that their cell phones and PDAs are impregnable and that they are invincible while using them.  Honestly, how many folks do you know who treat their phones with the same respect as their computers? How many users do you actually know who download and/or enable antivirus, firewall or other protection features on their phones?

So what happens if your essentially insecure, generally unprotected phone gets stolen?   Thieves could gain access to your credit card and bank accounts as well as have a pathway for accessing the checking accounts of others from whom you have received checks. In the world of horse racing, one would refer to this as the “Exacta.”

I am a big advocate for people doing what they want to do and an even bigger advocate for helping them find ways to, in fact, make the time to do it. That said, I am the biggest advocate for people not spending their precious time and energy – and expending considerable amounts of emotion – to undo massive damage caused by unknowingly choosing the wrong ways to save time – only to end up losing it along with jeopardizing their financial stability.

At the risk of being labeled the ultimate innovation bah humbugger, I am very concerned that the convenience of mobile deposits in a relatively unprotected environment just might be outweighed by the inconvenience of restoring your life after an identity theft incident.

So, you decide: Am I right, or am I just screaming in the wind?

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