Neil O’Farrell, Intersections Consumer Security Advisor is back today with a timely article about smart phones.
Phones are no longer what they used to be, or even intended to be. If you're one of the many millions of Americans who owns a smart phone, what you really own is a very powerful pocket computer that happens to include a phone.
It's that incredible pocket power that may quickly change the world as we know it. And what we know is that banking from your smart phone is already with us. Not only can you download apps that will allow you to log in to your bank account, check balances, and make payments, you can now deposit a check using your smart phone. That's because most smart phones come with high quality cameras that can easily scan check images into your phone and then sent to your bank.
But it doesn't stop there. Your smart phone is now being used, or at least considered as a replacement for things like:
- Your credit and debit cards. With the growth in use of RFID (Radio-Frequency Identification) technology, your smart phone could soon become a payment system that will allow you to simply hold your phone near a cash register to make a payment. Or plug it into a home computer to make a secure, hands-free online payment that can't be easily compromised by keyloggers or banking Trojans.
- Your driver's license. A smart phone could not only be used to store your driver's license, it could also hold your entire driving history, tickets, and even registration and insurance. If you're stopped by law enforcement, no documents required. Just hand them your phone.
And no need to worry about renewing your insurance or waiting at the DMV for a new license. Your phone and all its documents are updated automatically.
- A universal traveling identity. There's already growing discussion about the use of smart phones as a way to provide consumers with a single identity that would allow them to access any site on the internet but only have to log in once. And of course the phone offers lots of cool functionality to make it much harder to spoof your identity - to authenticate you by your voice or using the in-built camera or screen to scan and verify your face, retina, or fingerprint.
- Your passport. If a smart phone can be used as a universal id that includes the capability to verify your identity using biometrics like retina or fingerprint analysis, there's no reason why your smart phone couldn't replace your passport or green card.
As usual, the greatest obstacle to the full exploitation of this life changing opportunity is the security risk. And the most obvious risk is losing your phone, to carelessness or to a thief. If your phone becomes a central part of your everyday life, that life could come to a grinding halt if you lose it or forget it.
And if a thief manages to get his or her hands on your phone, and hours pass before you realize the phone is gone, that may be more than enough time for that thief to hijack your life.
The threat of malicious software targeted at smart phones is also on the rise, and criminals are now intensifying their focus on smart phones as their next big business opportunity. Intriguing this turn of events, when you think it was only a couple of years ago that the media was very skeptical that malware would every even work on smart phones.
Truth be told, a thief doesn't have to steal or infect your phone in order to compromise it. The early RFID technologies that make it easy to "read" information from a phone simply by holding or swiping the phone close to the reader were quickly compromised as hackers were able to find easy ways to intercept the radio communications used by this technology.
Then there's the issue of liability. As a consumer your liability for any fraudulent losses are usually limited, often to zero. But if you start banking and shopping from your smart phone, will financial institutions and retailers still hold you harmless, or pass the blame and cost to your phone provider?
Luckily the security industry has already responded, and for as little as $20 a year you can purchase smart phone security that in the event of a lost or stolen phone will lock that phone, wipe all the data, and restore a copy of everything that was one that phone to a new phone. And of course almost every anti-virus company now has some kind of security solution for iPhones, Android-powered phones, and most other smart phones.
Over time, most of these security issues will be addressed, even if not perfectly. The smart phone seems to be on a rapid path to becoming a life concierge in your pocket. It's already been widely adopted in Japan and many countries are now looking to Japan for guidance on widespread consumer adoption.
"The U.S. can look to Japan as a model for successful mobile innovation," said Beth Robertson, Director of Payments Research at Javelin Strategy & Research. "In Japan, mobile wallets play a broad role in consumers' lives. An individual's mobile phone might contain their airline boarding pass, help track their loyalty programs, unlock their home, pay for a taxi or soda out of a vending machine and be used to purchase items at a store. This wide array of functionality makes the mobile wallet an indispensable and integral piece of daily consumer life."