How to Reduce Mobile Banking Risk

The world of work has undergone some radical changes over the last decade. Businesses have offices and employees scattered all over the globe; meetings take place via optic cables and tablet screens. The very notion of a ‘headquarters’, where all the important stuff happens, seems anachronistic in 2015. One of the key concerns for this diffuse employment culture is ensuring the security of financial transactions conducted over wireless mobile networks. There are a few ways to reduce mobile banking risk, each with their own advantages and drawbacks:

Three Ways to Reduce Mobile Banking Risk

SMS Messaging

SMS has changed the banking industry inside and out, enhancing customer service and improving internal communications in a secure, reliable way. According to research by OpenMarket and International Data Corp (IDC), almost 90% of financial services companies believe mobile messaging has had a positive impact on the user experience, and 73% see text messages as an effective way to communicate with employees. 

SMS’ secret weapon is two-factor authentication (2FA), which drastically reduces the risk of fraudulent activity on an account. Even with 2FA in place, most financial organizations send notifications regarding high-dollar, high-risk transactions. 

The benefits of mobile banking go further than security (though, clearly, that’s the priority for both customer and bank). One in five financial services companies are using mobile messaging to ensure business continuity and enhance multichannel capacity, and one in four use it to improve risk mitigation (according to the IDC study). More than a third of banks use SMS to attract new business and improve retention rates for existing customers. 

Biometrics

Face, voice and fingerprint biometrics are making headway into finance security management. Facial recognition usually requires users to look at a screen and blink when prompted; for voice recognition, they read a short phrase.  

The simplicity of these actions is significant. It means biometrics and mobile messaging needn’t be mutually exclusive for the sake of convenience - they can work together to create a multi-factor authentication process that enhances security. Add to that the security of a password-restricted biometrics app, contained on the mobile device of the user, and you have a pretty tight ship and can significantly reduce mobile banking risk.

Behavioral Biometrics

Even newer and shinier than physical biometrics is the concept of behavioral biometrics. It works by monitoring session behavior in desktop, mobile and cloud apps and creating a unique profile that draws on physiological data such as palm size and swipe and press patterns, as well as behavioral traits like usage preference and location habits. 

A number of behavioral biometrics systems are being developed for use by banks. Clearly, these additional layers of risk analysis and security can help protect customers - even across multiple devices - and provide a more frictionless experience at the same time.

This is all good news for mobile banking, which is already used by around half of customers at the main U.S. banks. Passwords are still expected by users, so are unlikely to disappear from view any time soon. Behavioral and physical biometrics are beginning to run alongside traditional log in data as a secondary line of defense, continually tracking the online tendencies of users to build an accurate picture and identify cyber security risks more quickly. The beauty of biometrics for the user is that there’s no need to download software or endure long sign up processes. All they have to do is, literally, be themselves.