Tread Carefully on Mobile Banking

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This NewsFactor story says banks and other financial institutions are heightening their security infrastructures in anticipation of growth in mobile banking.


We know that progress cannot be stopped. We also know that if the market wants mobile banking -- and the story says that it is being pushed by the all-important under-35 group -- it's going to happen, despite any security implications. Finally, we are confident that the tools are there to make this work in a reasonably secure manner.


Still, we are wary. Very wary.


We live in a world in which folks have trouble keeping possession of their laptops. Small cell phones are easier to lose and easier for crooks to steal. In such an environment, the image of millions of devices floating around that are one or two hacks away from giving the bad guys access to the rightful owner's bank account frightens us.


The NewsFactor story offers some details on how careful these companies will be. That's all well and good, but it seems that mobilized banking can't do anything but increase the opportunities for hackers and crackers.


Experts say cell phones have stayed relatively trouble free because there is no "killer app" motivating the criminal element. That would change, of course, if mobile banking grows. Bottom line: If history is any guide -- and it usually is -- the minute a clear profit motive presents itself, malcontents will come out of the woodwork with exploits security folks have not even dreamed of.


One element of the story gave us pause in a more immediate sense. In brief descriptions of the institutions' services, the writer says that Visa USA and Citibank's mobile banking customers can immediately stop services if the phone is lost or stolen. One of the big issues in corporate mobility is how to handle the lag time between the point at which a device goes missing and when the traveling executive notices its absence (or decides to do something about it). We can envision frantic bank customers on the phone with customer service representatives arguing whether or not that $10,000 transfer was made before or after the phone disappeared.


Clearly, we may be pessimists. Things may go fine. A big side benefit will be that the security advances made by financial institutions will filter through to the greater universe of mobile users. The fear, however, remains: Mobile banking must be resisted until adequate security is ready.