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News

Mobile banking boom demands new approach to security

41st Parameter : 24 April, 2009  (Technical Article)
41st Parameter comments on the changing structure of security for mobile banking transactions with the growth in the industry as predicted by Arthur D Little
In its April report entitled 'Banking on the Go', management consulting firm, Arthur D Little, states that the growing maturity of the mobile Internet coupled with the need for more advanced services than just SMS, provides an important revenue stream for the financial sector. Dr Gerrit Seidel, Managing Director and Global Head of Arthur D Little's Financial Services Practice, enthuses: 'The mobile phone has become one of the most indispensable devices the modern consumer carries with them each day. For banks to deliver on personalised service and an exceptional customer experience, offering sophisticated mobile banking solutions will be a key differentiator in the coming years.'

However, as with every new technology come new security implications and threats - in this case the protection of consumers' personal information. Banking being on a mobile creates much greater security concerns, which have to be addressed. With reports that networks of high level gangsters are trading not just bank account details and card security codes, but mobile phone numbers, as well as email addresses, pin numbers, passwords, and dates of birth of unsuspecting members of the public, banks need to put in place serious anti-fraud measures.

41st Parameter's Ori Eisen, Founder & Chief Innovation Officer, believes that real-time tracking and a multi-layer approach that comprises Client Device Identification technology are vital and immensely powerful security tools that financial services looking to move beyond the SMS-based model need to adopt in order to take the lead as early innovators in next generation mobile banking: 'We believe that sceptics have good reason to be apprehensive. As the number of global mobile banking transactions rises from 2.7 billion annually in 2007 to 37 billion by 2011, banks are faced with enhancing their security measures to help address consumer concerns - a key hurdle still needed to be overcome to ensure the continued success of mobile banking. The transactions between a mobile device and institution aren't as well-guarded as their Internet counterparts, with only basic identification and verification checkpoints. Authenticating a user's identity in mobile banking is however, as critical as it is with fixed line Internet. Yet, in reality mobile banking systems are falling at this particular hurdle. Most mobile banking systems have a 'sentry at the gate' mechanism that catches some fraud, but this is not enough. They aren't able to ascertain whether the device transacting on its mobile site is in fact a mobile device or a PC or laptop acting as one. With Client Device Identification, banks can add new layers of strength to its security without changing the user's behaviour, without leaving tags on the device and without 'showing your hand' to the fraudsters.'
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