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Is Mobile Banking Safe?

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Americans love their smart phones.

The reasons for their adoration are seemingly endless. They Facebook. They text. They Google. They listen to music and watch movies. They take photos and video. They GPS their way to new destinations.

And increasingly, they bank.

An estimated 87 percent of Americans now own mobile phones, and 71 percent of those devices are Internet-enabled smart phones, up from 61 percent last year, according to the Federal Reserve’s Consumers and Mobile Financial Services Report released earlier this year.

The report found that 39 percent of mobile phone users with bank accounts had used mobile banking in the past year, up from 33 percent in 2013 and 29 percent in 2012.

Of those not using mobile banking, the primary reason survey respondents cited, at 86 percent, was a belief that their banking needs were being met without the use of mobile banking.

But the next most common reason cited, at 62 percent, was concerns over security. Banking experts say that’s an obstacle they’re confident they can overcome.

Tested and Secure Technology

First Bank has offered customers a mobile banking app since 2008, but it wasn’t until January of 2015 that the app underwent a significant upgrade, adding increasingly popular features such as mobile check deposit and mobile bill pay, says Hunter Young, First Bank’s Senior Vice President, Director of Marketing and Digital Banking.

Unlike larger regional and national banks, who are constantly adding “shiny” new app features in an effort to draw new customers, smaller community banks like First Bank are more “pragmatic,” Young says.

“We wait until the technology is more proven,” explains Young. “It doesn’t take much longer, maybe one to two years. They’re moving a bit too quickly for security and a good customer experience.”

Consumers who are new to mobile banking might not realize that banking through an app is more secure than through a web browser, says Cary Whaley, vice president of payments and technology policy at the Washington-based Independent Community Bankers of America.

The vast majority of fraud involves credit/debit cards and checks, rather than from mobile apps, Whaley said. With a mobile app, the bank knows with whom it’s dealing. The app typically cannot be accessed without a password or challenge question, and with a growing number of devices, biometrics such as a fingerprint.

“That’s pretty powerful security,” Whaley said. “We would call that 2-factor authentication.”

First Bank mobile app users should know they can trust they’ll be protected from fraud, says Will Ferrer, a senior vice president at Austin, Texas-based Q2 Holdings, the software firm that developed and hosts First Bank’s app.

Q2 has invested $10 million over the past three years in data center infrastructure, and the company is hosting First Bank’s app at data centers that meet the highest standards for performance and security, Furrer says. Those facilities are highly regulated and heavily secured.

“This app is hosted in two Level 4 data centers that are run by a publicly traded company that provides digital banking services for over 360 banks and credit unions around the country,” Ferrer said. “We have over 5.7 million users of our mobile apps, so security and performance obviously are paramount to us as we’re serving banks like First Bank. We know how important security is and continual investment is what banking customers appreciate and respect.”

 

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