Is banking on your smartphone safe?

Fact Checked
If you live life on the move, mobile banking can seem like an ideal way to keep track of your finances. But is it a safe way to manage your money?
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Mobile banking registrations jumped 200% in March 2021 due to the coronavirus pandemic. But are these efforts to avoid touching filthy lucre worth it? Is banking via the phone safe?

Is mobile banking safe?

Banking using your smartphone gives you direct access to your bank accounts. But it also means your account could be open to anyone who manages to access your phone.

Most banks provide apps that let you manage your money via your mobile. Others only allow smartphone users to log into a full version of their internet banking site.

Text update facilities give you notifications of your balance or a mini statement. They pose little risk as they don’t provide direct access to your accounts, and as such, there’s little a potential fraudster can do with this facility alone.

Do you need antivirus for your smartphone?

Mobile viruses are becoming more sophisticated and a greater threat. 

Newer mobile phone operating systems come with built-in security - which means keeping your operating system up to date is a key priority.

If you plan to use your smartphone for banking regularly, then antivirus software can add an extra level of protection.

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

You can also get free antivirus software with many broadband deals.

Does your bank offer antivirus software?

Some banks now offer specific software to tackle the threat of mobile fraud, which aims to provide extra security to protect you from any computer virus or Trojan attack.

How does your bank make mobile banking safe?

Most mobile banking apps don’t store your bank details directly on your phone but instead access them from a secure data centre, and this means your mobile itself will never hold your personal bank information. 

Banks can also issue refunds if your phone account is compromised. 

Check your bank fights mobile fraud

UK banking institutions will refund any losses caused by unauthorised transactions if you’ve taken reasonable care and not misused the service. As the Financial Conduct Authority states on its website

“In most cases, the bank must refund the payment without unnecessary delay. This should be by the end of the next business day unless the bank has reasonable grounds to suspect that you acted fraudulently.”

However, most banks don’t publish a policy about their guarantees against fraud when accessing internet banking from your smartphone. If you have any doubt about where you stand, you should contact your bank to check before logging on.

If your bank offers no guarantees or their protection is unsuitable, you could switch to a new current account provider

Is online banking worth it?

Standard mobile banking applications let you:

  • View account balances

  • View mini statements

  • Transfer money between your own accounts

The increased level of protection on offer makes it easy to check the activity on your account but less easy to take money out.

Dedicated mobile banking apps typically let you send money to existing recipients you’ve set up using the bank's online banking service. 

Logging in to your online banking

Using your smartphone to access the online banking facility on your bank's website lets you perform the same functions as logging onto your home computer in your living room.

While online banking opens you up to some risks, it does provide you with easier access to your account and means you’ll be quicker to spot any fraudulent transactions and report them if you fall victim.

Providing you take the necessary security precautions, you have no reason to think mobile banking is less secure than any other means of accessing your accounts.

What happens if your phone is lost or stolen?

Should you lose your mobile, 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, whoever has your phone can’t access your mobile banking. So don’t panic.

Can you make your phone more secure?

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

  • Only download mobile applications directly from your bank – they’re free to use, and you can download them 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’s a remote deletion option that means you can delete any data stored on the phone if you discover it’s lost or stolen

  • Make your smartphone more secure by using a PIN or password to lock your phone when you’re 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 by avoiding accessing your bank accounts from public networks

Avoid 'jail-breaking' your iPhone

Jail-breaking describes the action of modifying your iPhone to allow the installation of unofficial applications that the provider hasn’t approved. 

Advocates argue that jail-breaking gives you more control over what you can do with your Apple device, removing restrictions the company imposes on your iPhone or iPad, but it’s risky.

Doing this removes certain security features that protect your phone from remote access. There are already viruses that take advantage of 'unlocked' smartphones to target online banking data.

Look out for scammers

There are people out there trying to take advantage of mobile banking to rip you off.

Banks will never ask for your mobile banking passwords or login details by phone, text or email, so any contact you receive asking for this information should be treated as a scam.

It’s also worth making sure your online banking has a different password from your phone.

Biometrics are convenient, but there has been at least one incident in the UK of a thief spiking a man’s drink to steal thousands of pounds.  The criminal stole the victim’s cards and phone, then used online banking to first transfer cash from savings into his own current account, before extending the victim’s overdraft and withdrawing that money too. Using a passcode could have helped avoid this.

New bank accounts are offered all the time, so compare all of the best options to make sure you get the right one for you.

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