Top Mobile App Security Threats For The Banking Industry

Digitalization is in full swing in the fintech, eWallet providers, and banking industry, and it’s brought along numerous benefits to financial institutions. Lack of security is a significant problem for all apps; however, mobile banking — possibly the most valuable innovation from the audience’s perspective — comes with a wide range of risks. According to an Intertrust report, 77% of financial apps involve at least one vulnerability that could induce a data breach. Such vulnerabilities range from passwords being sent unencrypted to unprotected network connections. There are also risks associated with coding languages and frameworks.

If financial institutions do not upgrade their platforms, they will be vulnerable to attacks that exploit these vulnerabilities.

Outdated applications can be susceptible to a wider variety of attacks due to poor security, including phishing scams and malware propagation. They are also vulnerable to insider threats. This is because malicious actors can steal credentials or data from disgruntled employees.

What Does Digitalization Mean In The Banking Sector?

Digitalization in the banking sector involves cutting-edge technologies such as accessible mobile apps and cloud computing to solve business issues by bringing services and products closer to users. It is a necessary move by banks to maintain the pace of technological advancement and keep up with the changing times.

For example, Internet banking used to be a tedious process in the past where one had to go to a branch or log on via a desktop computer to perform transactions. It has undergone a sea change now and can be accessed through smartphones and tablets.

Digitalization also helps banks track financial data easily and thus makes business operations smoother.

Top Security Issues Of Mobile Apps In Banking

Data security is a complicated issue because of these three aspects:

1. Internal business processes
2. Software security measure
3. User behavior

If one element fails, the rest cannot always compensate. Even well-implemented and efficient security tools can’t stop users from making mistakes. Therefore, the outcome is bleak: sensitive data can never be entirely secure. However, we can minimize the likelihood that a banking app security breach will happen.

What Type Of Data Attracts The Attention Of Cybercriminals

Business data becomes a target when it’s of high value to cybercriminals, and different types of data represent different levels of business risk.

• Financial Information — This includes bank accounts, charge card numbers, and their expiry dates, investment details, etc.
• Personally Identifiable Information — This includes contact numbers, social security numbers, birth dates, educational details, etc.
• Intellectual Property — This includes product manuals and drawings, specifications, marketing symbols and texts, scientific formulas, proprietary software, etc.
• Health Information — This includes health condition details, medical records, treatments, prescribed drugs, etc.
• Competition Information — This includes business plans, market studies, pricing information, etc.
• IT Security Data — This includes encryption keys, usernames, and passwords, network structure, security keys, etc.
• Legal Information — This includes court cases documentation the firm may be pursuing, acquisition and merger details, regulatory rulings, etc.

What Can Happen If Data Breach Occur In Banking Apps?

There is no scenario for a banking app security breach, as much relies on leaked information. However, mostly the consequences are dire!

• Leaked card information can result in a user’s money being stolen.
• Personal information can be used to reach users with false information, resulting in extortion and phishing.
• Data breaches in banking apps reduce users’ trust.

Users, who suffer direct losses, may seek compensation and issue complaints, further ruining the bank’s reputation and causing significant damages on a larger scale.

The long-term damage could have a harmful effect on the economy and businesses that depend on customers trusting that their personal information will be safeguarded. Furthermore, legal decisions are consistently demonstrating that firms will be held responsible for data leaks. Banks and financial firms must ensure that transactions are legitimate and authentic or risk losing market share. When a user’s financial data gets breached, it does not always have to be the bank’s fault for users to hold the firm accountable. Consequently, financial firms and banks should be more inclined to safeguard sensitive information using security measures such as app security testing and threat monitoring.

Top Mobile App Security Threats In Banking Industry

Improper Mobile Platform Usage

Android and iOS offer unique security solutions, including permission systems or TouchID. Each platform provides guidelines for creating secure applications to avoid significant threats, and failing to follow them can be a huge mistake.

Major Risk — Improper implementation of platform security features can corrupt customers’ sensitive data.

How To Avoid — Implement platform-specific security practices for server-side operations and mobile interface. You can find them in iOS and Android documentation.

Insecure Communication

Mobile apps communicate with external sources, including NFC, Bluetooth devices, servers, etc. Never avoid this communication as the application’s core functionality often relies on it. Without sufficient security measures, it can cause data breaches.

Major Risk — There are techniques and tools for externally accessing the device’s communication traffic, leading to identity theft or fraud.

How To Avoid — Encrypt the communication using SSL and several communication tools such as solid encryption algorithms and authentication.

Unsafe Authentication

Banking apps, in particular, provide customers with multiple authentication methods such as fingerprint scanning, user ID, PINs, strong passwords, etc. Robust authentication allows customers to manage the assets securely.

Major Risk — Without appropriate security measures, malware can bypass the app’s authentication, leading to unauthorized access to personal data.

How To Avoid — Local authentication is often more vulnerable; banking apps must provide server-side authentication options. Moreover, the app shouldn’t store the user ID, password, PINs, etc., on the device.

Improper Authorization

Authorization is subtle and determines which app’s parts are accessible to a given consumer, based on their role (end-user, administrator, etc.). Using well-structured authorization, you can ensure that each user will receive the information they’ve been given access to.

Major Risk — A cybercriminal can exploit this improper authorization vulnerability and can gain access to restricted data.

How To Avoid — Avoid relying on permissions and roles enforced on your mobile devices. Instead, each role within the mobile app should rely on server data.

Code Tampering

It’s possible to change a few parts of the app’s binary code and create its copies. This allows the cybercriminal to tamper with API calls and run malicious code. Generally, hackers distribute an app’s malicious version through phishing attachments.

Major Risk — A hacker may steal data, gain authorized access or intercept communication.

How To Avoid — Technically, an app’s code is highly vulnerable to code tampering. Code creators are not accountable for the code that runs within the mobile platform. Therefore, it’s essential for banking apps to include a runtime detection system within the app to detect if the code has been tampered with based on its integrity during compilation.

Reverse Engineering

Reverse engineering is the method of accessing an application’s source code to learn its business logic. It can also be used to check which security tools are implemented.

Major Risk — Reverse engineering can reveal potential backend authentication secrets. It may give the hacker valuable information on an app’s logic and security measures.

How To Avoid — Code obfuscation tools must be used to make it highly complicated to identify logical connections between code parts.

Unsafe Data Storage

For sensitive information, every banking app should use secure storage solutions, especially internal storage, since it’s the prime target for data leakage.

Major Risk — Unprotected confidential information can be accessed and used for illegal activities.

How To Avoid — Use secure algorithms and store sensitive data with proper encryption.

How Fintech/Banking Industry Can Defend Against Mobile App Security Threats

Security vulnerabilities in banking apps require immediate action. Secure app development will reduce risk, but it cannot eliminate it. Therefore, to defend against mobile app security threats, fintech/banking firms should adopt threat monitoring and detection solutions to gain intelligence into where the app’s most significant security gaps are and what steps should be taken to close them.

Furthermore, app security testing should be the top priority to protect the apps against potential threats since it empowers the enterprise to assess the security risk early in the development process. However, prevention of security issues with the code is one section of the defense strategy; it’s essential to put protections in place to stop static and dynamic attacks. That’s where app hardening comes into play. App hardening focuses on protecting and strengthening the mobile app across multiple levels using various layers of obfuscation and encryption. Implementing a combination of security testing and threat monitoring, in conjunction with app hardening, you can drastically protect your mobile app against top hazardous security threats.

The expectations of app developers to create a fully functioning and secure mobile app continues to grow. However, it requires an introspective approach to improving effort around app security, including cautiously identifying and selecting the vendors to work with!

Why It’s Worth Avoiding Mobile App Security Threats In Banking Sector

Providing customers with robust security protects the organization from lawsuits or complaints and bolsters the organization’s image, and builds credibility. Furthermore, McAfee Mobile Threat Report revealed that malware creation is a highly profitable endeavor, and a banking Trojan could bring in revenues of $1M — $2M.

It could create potential revenues for malware creators in the billion-dollar range. This criminal activity is becoming widespread since people engage with multiple financial institutions and banking apps online through mobile devices. Investing in strong security measures is not a choice — it has become a necessity now!

FINAL TAKEAWAY

While these are not the only mobile app security threats, they’re by far the top ones. It’s no wonder that online platforms and mobile apps have made online banking processes convenient and straightforward for users. However, this also brings in the massive risk of attackers compromising the data resulting in chaotic situations. So, it’s essential to use banking apps with utmost care.

The top mobile app security threats that we mentioned in this article can help you significantly combat the shortcomings of conventional methods and make the banking apps safer!