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This article was last updated Oct 09, 2017, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
Mobile banking does seem to be the way of the future and it offers great convenience and flexibility. We are huge fans of technologies that can simplify our financial lives to save us time and trouble. Of course, the best way to ensure that you don’t have your credit profile or bank account information stolen from your smart phone is to never use a phone for online banking, but that may seem like overkill. There is no need to throw the baby out with the bathwater just because smart phone technology is still in their infancy stage.
You can bank by smart phone with confidence, you just have to use common sense and always take precautions to ensure that your banking transactions are conducted in a safe and secure manner as possible. Your financial institution goes to great pains to make sure that its smart phone banking app is secure. If your account gets hacked because of a flaw in their system, it’s going to cost them a whole lot more money than it will cost you because their brand and image will be severely tarnished and compromised. They have sophisticated, well-funded IT departments that are busy watching your back 24/7, and that should reassure you.
There are steps we can take as consumers and bank customers to ensure a safer banking experience, however, it is our responsibility to follow them. So here are some tips for smarter usage of your smart phone when engaging in online banking and similar kinds of financial communications.
Apps, Passwords, and Alerts
The smart phone banking app offered by your financial institution was carefully engineered to protect your data, but keep in mind that it’s not sufficient to simply download the app one time and then forget about it. You have to treat it the way you do any other critical piece of software and continue to download new and improved updates on a regular basis; otherwise you might fail to receive a security patch or upgrade intended to cure a bug or plug a leak that criminals can exploit.
Passwords associated with your bank accounts should also be robust because they may be the weakest link in your smart phone security system. The best passwords are at least a dozen characters long and combine number and letters, even utilizing some upper case letters. Don’t use features that let your device “remember” your passwords either, because those defeat the purpose of having a secret, hard-to-crack password.
Once your account is established, go online and set the available personal preferences that are offered by your bank. Most banks and credit card companies will, for example, send you an email or text alert if your account experiences a certain kind of activity. You can set up the account to notify you of withdrawals over a specific dollar amount, for instance, or if withdrawals occur with a certain amount of frequency. Alerts are great for notifying you of suspicious activity in the account that wasn’t initiated by you.
Risky Behaviors to Avoid
Never perform banking transaction over an unsecured or public network because that’s an open invitation to hackers. If you’re using the public WiFi offered by a coffee shop or airport, for example, anyone else on that network can eavesdrop on you through your smart phone or similar device.
Instead you should only connect to the Internet through your carrier’s own 3G or 4G network because the carrier will encrypt your data as it transmits it, making it virtually impossible for thieves to read your communications and steal information. Meanwhile text messages are not encrypted in the same way, so do not communicate with your bank or credit card company via text.
Don’t respond to junk mail received on your phone, either, and don’t click on links in emails or text messages from parties you do not recognize. Hackers often use these to plant bugs in smart phones. Even if you receive a link in a message from a friend it’s a good idea to confirm with them that they sent it before you open it. Otherwise you may find out too late that somebody hijacked their phone and address book and used it to send viruses and malware.
Smart phones that are Bluetooth-enabled are convenient, but that wireless connectivity is yet another avenue that hackers can use to penetrate your defenses. Before doing online banking or sending confidential financial information through your smart phone, disable the Bluetooth.
Other Steps Worth Taking
While you’re at it, it’s a good idea to use smart tactics for taking care of other data you may have on your phone. You don't want to be in a position where your phone is stolen and your left wondering if you backed up your data. Items like music, photos, or an address book may not have lots of market value – but if they are precious to you then losing them can be a huge personal loss. That’s why it’s a good idea to periodically save copies of those to a data card or computer. Then, if your phone is stolen or destroyed, you won’t lose them.
There are also methods for moving data files from a PC to a smart phone, so you may be able to reinstall everything on your new device after your old one was lost or stolen. As long as you have the phone insured (another great idea considering the high cost of smart phones), you’ll simply get a new one to replace it and won’t incur any significant loss.
Last but not least, if your smart phone does vanish with confidential information on it, there are programs that will remotely wipe it clean as a whistle. Apple is even introducing a new feature on its iPhone that acts as a “kill switch” to turn a stolen iPhone into a paperweight. That way even if the phone falls into the wrong hands it will be useless to them and your data will remain safe and secure.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.