Smartphones are becoming an increasingly popular option for consumers
purchasing new cell phones, partly because they allow them the functionality of a computer in a convenient handheld device. However, many individuals remain hesitant to use their smartphones for mobile banking. In fact, a 2011 Javelin Strategy Research study1
showed 40 percent of smartphone users believed banking on such a device was not safe in 2010, which was a 54 percent increase from the number of users who felt that way in 2009. Many consumers appear to consider mobile banking an identity theft risk factor, discouraging them from undertaking financial matters on these devices. However, there are ways to bank on a mobile device safely, cutting down on consumers’ identity theft risk. Risks associated with mobile banking
The concept of mobile banking is still relatively new, meaning consumers may not be wrong to have some concerns about conducting financial business on a smartphone. For instance, text messages and emails are not encrypted, meaning they can be vulnerable to interception. Additionally, not all smartphones are compatible with antivirus software, leaving them susceptible to malware and other data-stealing programs. At the same time, banks are adopting better encryption practices for wireless transactions, and financial institutions generally look to avoid sending important information — such as account numbers — via text message. Ways to help limit your risk for identity theft
If you choose to bank on your mobile device, there are a few steps to take to help protect yourself.
- Use password protection — Most smartphones allow you to set a password and lock them when not in use. Doing so might help slow down identity thieves if your phone is ever lost or stolen.
- Don’t store sensitive data on your device — Smartphone users should be sure to delete texts or emails with any personal data. Don’t keep any account numbers or other personal information on the device.
- Update your financial institution when you change your phone number — If you lose or change your smartphone, contact your financial institution to update your mobile banking settings and prevent any information from being sent to another person.
- Keep your personal data private — Never respond to texts or emails asking for your account number or any other critical information. Practicing good mobile banking habits may help reduce your chance of falling prey to identity theft, and can potentially help protect your credit reports and scores.
†You will be billed $3 for the first 30 days and then $13.99/month thereafter, which averages out to less than $0.50 a day. Source: 1https://www.javelinstrategy.com/brochure/216