Smart phones let you access your bank accounts whenever and wherever you are - but are you leaving yourself open to fraud and loss when you do so?

Is it safe?

Some banking using your smart phone provides you - and anyone who accesses your phone - with direct access to your bank accounts.

Many banks allow smart phone users to log into a full version of their internet banking site using a smart phone. Others provide banking apps that let you manage your money via your mobile.

Early smart phones only let you to run one application at a time. This means that while you use your mobile banking application there is unlikely to be another program (like a virus or other malicious software) running in the background and posing a security risk.

Phones that allow you to access multiple applications simultaneously, like the iPhone 5, pose the biggest risk when you use them to access your bank accounts.

This is because with multi-tasking comes a greater chance that malicious software could be running in the background without your knowledge.

Are text updates safe?

Text update facilities give you notifications of your balance or a mini statement in the form of a text. They pose little risk as they do not actually provide direct access to your accounts. As such there is little a potential fraudster can do with this facility alone.

Is it actually worth it?

Standard mobile banking applications let you:

  • View account balances

  • View mini statements

  • Transfer money between your own accounts

This means it is easy to check the activity on your account but less easy to take money out.

Some dedicated mobile banking apps also let you send money to existing recipients you have set up using the bank's online banking service. This means you can send money out of your account to pre authorised recipients but not to any bank account.

Logging in to your online banking

Using you smart phone to access the online banking facility on your bank's website lets you perform the same functions as if you were logging onto your PC in your living room.

While this opens you up to the same risks it does provide you with easier access to your account and means should you fall victim you will be quicker to spot any fraudulent transactions and report them.

If you take the necessary security measures, there is no reason to think the banking via your smart phone is any less secure than any other means of accessing your accounts.

If it means you check your finances on a more regular basis, then that has got to be a good thing.

Does your bank make mobile banking safe?

Most mobile banking apps do not store your bank details directly on your phone, but instead access it from a secure data centre. This means your mobile itself will never hold your personal bank information.

Some banks now offer specific software to tackle the threat of mobile fraud.

For example, Barclays currently offers free Kaspersky Mobile Security Software with their phone banking application. This is aimed at providing an extra security level to protect you from any virus or Trojan attack.

Does your bank fight mobile fraud?

Check if your bank will refund any losses you incur if you fall victim to mobile fraud. Most UK banking institutions will refund any losses if you have taken reasonable care and not misused the service .

However, most banks do not state a policy on guarantees against fraud when you access internet banking from your smart phone. If you have any doubt as to where you stand then you should contact your bank to check before logging on.

Do you need antivirus for your smart phone?

Most of the major antivirus providers offer dedicated smartphone security packages. These monitor background activity on your phone to stop viruses compromising your personal data.

If you plan to use your smartphone for banking on a regular basis then antivirus software adds an extra level of protection.

Mobile viruses and worms are only going to become more sophisticated and a greater threat in the near future. As a result it is certainly something worth considering.

What happens if your phone is lost or stolen?

Contact your mobile network provider as soon as possible. They can then block the phone to make it unusable.

As long as your passcode or log in details are still secure then whoever has your phone would not be able to access your mobile banking.

Can you make your phone more secure?

To reduce your chances of falling victim to fraud when you bank online via your smart phone you should:

  • Only download mobile applications directly from your bank - they are free to use and you can download without any reservations about the software.

  • Download any free security software provided by the bank.

  • Install quality security software. Often if you have it installed there is a remote deletion option that means you can delete any data stored on the phone if you discover it is lost or stolen.

  • Set up your smart phone to be more secure. Use a PIN or password to lock your phone when you are not using it.

  • Make sure your phone's browser does not automatically input your passwords or usernames for you.

  • Switch off the Bluetooth function on your mobile when it is not in use. This will stop any unmonitored wireless activity on your phone. You can take this further and avoid accessing your bank accounts from public networks, if you are happy to restrict where you log on.

  • Delete any text messages from your bank when no longer needed, so that any information they have sent to you is not sat in your inbox.

Avoid 'jail-breaking' your iPhone

This is where you modify your iPhone to allow the installation of unofficial applications that have not been approved by the provider.

Doing this removes certain security features that protect your phone from remote access. There are already worms that take advantage of 'unlocked' smart phones which target online banking data.

Look out for scammers

There are people out there who are trying to take advantage of mobile banking to scam you and get access to your money.

Banks will never ask for you mobile banking passwords or log in details by email, so any message you receive asking for this information is likely to be a scam.

If you are suspicious in any respect then contact your bank to check if they have tried to contact you.