Mobile Banking Security

Consumers love the convenience, but security issues are making them nervous.

November 14, 2011
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Even if mobile malware proliferates, says Dye, the mobile platform offers unique, yet cost-effective, opportunities to enlist the members themselves in managing fraud and other risk.

For example, mobile banking apps often feature alert notifications, which send notices or text messages based on criteria the members select. Members can set filters so their app notifies them if they exceed spending limits on certain cards or if their cards are used in unauthorized transactions. Members who limit online purchases to one credit card receive an app notification if someone tries to place an online order in their name with another card.

“If something is happening that doesn’t look familiar, I find out and can respond to it immediately,” explains Dye. “The marketing term we use for it is ‘deputizing your members.’ That serves two purposes, because I’ve kept them informed and I’ve also kept them in a very inexpensive channel, in terms of support. If you can stay in the mobile channel, you can do all this and control your costs.”

Members seem to see and respond to notices on their phones sooner than they would to e-mails or even phone calls, Dye adds. “The interesting thing about mobile is that it’s with most of us most of the time, and we’re all used to using it to take care of things on an immediate basis. We get a piece of information, we respond to it, and we go on with our day.”

This behavior pattern, Gray notes, presents another opportunity. Credit unions can use the same notification features they use for fraud prevention for marketing. Push notices can alert members to falling mortgage rates or car loan specials. If current behaviors bear out in mobile banking, app notices stand to be an effective means of direct communication with members.

Those opportunities aren’t lost on Craig, who’s excited to harness the potential that mobile banking offers for member retention and business growth.

“We’ve been tracking traffic to our site by device,” he says. “I’ve wanted to go mobile for a long time but the members weren’t there. We’re finally seeing the traffic of mobile devices to our site to make it worth the expense to roll it out.”

The credit union’s timeline was controlled more by demand than by risk, Craig explains. “Until now, we didn’t think we’d get enough traffic to make it worth the investment.”

He advises other credit unions to weigh the costs and benefits of adding the technology. But he cautions against holding back on mobile banking out of fear, alone. Even boomers and seniors are using physical branches less, and younger generations are quicker to adopt new technology.

There isn’t a single market that won’t be in the mobile space in the next 10 years, he predicts, “and I seriously doubt it’s going to be something you can ignore forever.”


  1. Credit Union Environmental Scan
  2. National Member Survey
  3. Survey of Potential Members

Controls and Protection

Ron Kimball
December 20, 2011 1:06 pm
Great article but I had to comment on David Dye's comments regarding how the controls are "as much, or more protection, as you do on a PC". The devices this article is referring to are consumer based devices and therefore do not require the user to use a username or password. In the case of most mobile phones, if the user does opt to use a password, it is most likely a simple 4-digit numeric password. I fully understand, and agree, that authentication and network encryption are on par with most PC applications but to say the controls are the same (or better) is a bit of a stretch. I would contend that it's more likely that a PC has anti-virus installed (perhaps not updated but installed), on a windows PC perhaps has the security center running, and maybe even a firewall. From a risk perspective I would have to say the impact to the user is the same, the likelihood of loss is significantly higher since I haven't heard of too many PCs being left in the back of taxi-cabs lately and the control environment is signficantly different. I'm not advocating that PCs are better, just that to say the risk is the same or better with a mobile device is very misleading. Both environments are plagued with their issues and users need to be aware of the risks. I just don't think it's wise to go on record with a user and say they're 'more secure' than they would be if they used their PC. IMHO

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