Boost for mobile banking security
Security has not been a major issue for mobile users in the past, when text message technology was primarily used for sending messages to friends. However, with the advent of mobile banking and the use of text messaging applications for transmission of sensitive information such as 1-time PIN codes, financial and personal information, security issues have come to the forefront again.
For enterprise businesses and financial institutions security issues have been one of the major stumbling blocks to acceptance of text messaging as a primary communication channel. Text messaging is an extremely popular communication tool that cuts across all demographic barriers; it is also a relatively cheap form of communication for businesses – between the organization and clients, between the organization and employees and even between automated systems and clients or employees.
IBM’s recent announcement that it would be putting $100 million into improving mobile communication systems for businesses over the next five years is a welcome sign that big business is taking mobile messaging seriously. IBM’s focus will be analytics, privacy and user interface and navigation as well as security issues. Concerns over corporate security have hindered enterprise adoption of text messaging and text banking solutions in the past.
There are a variety of text message security measures that can be implemented to ensure the safe and private nature of business or financial communication. Secure Sockets Layer (SSL) technology allows businesses to process sensitive data while offering privacy to clients. SSL encryption protects the sensitive information during transmission. Both 128 and 256-bit encryption can be used and they are of Bank and Telco grade security levels.
Working in conjunction with a reliable SMS gateway provider, companies and financial institutions can offer additional security measures such as FFIEC compliant 2-factor authentication. This security layer is exposed to the user prior to the transaction taking place. For example, following a user transaction such as an online banking login attempt, a unique code for web-based entry is dispatched to the user via a text message. This PIN code is normally time sensitive and if not used within a certain time period, its validity expires.
Other options include measures such as ‘Card not present’ authentication tokens that are also sent via text message allowing users to complete their online transaction. Other options include mobile authentication measures involving secure channel switching from SMS to voice or audio on entry of a verification PIN code. This ensures that the PIN code is not stored in the device or in the SMS outboxes.
Both the insurance and financial industries have seen a dramatic decrease in fraud and identity theft since using text messaging systems to convey information to their customers. Some of these text messaging applications include ‘point-of-sale receipts’, fraud alerts and transaction notifications. This reduction in risk translates directly into a reduction in costs and therefore high profit margins.
Financial institutions stand to gain in many ways with the adoption of mobile banking as a secure, convenient banking channel.
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