BID Daily Newsletter
July 24, 2014

BID Daily Newsletter

July 24, 2014

Mobile Malware And Fear Of The Unknown

Trauma can cause people to react in a variety of uncharacteristic ways. There have been scores of stories in the press about veterans who return home from military service unable to function normally because of post-traumatic stress disorder. There have also been plenty of people who developed a fear of flying after the Sep. 11 terrorist attacks in New York. We even know of someone who refuses to travel on highways, having been in one of the last cars to cross the Mianus River Bridge on Interstate 95 in CT before it collapsed on June 28, 1983, killing three people.
There's no doubt that traumatic events can really impact people and the ones beyond our control can have the greatest lasting impact on human psyche. While admittedly not as impactful on people's lives as the examples above, mobile malware attacks seem to be increasing significantly and reaching into more and more places where people might "store" their records and money, so it is scary indeed. It's been widely reported, for instance, that a new type of malware targeting mobile devices has now spread from Russia to the U.S. Using this malware, the crooks look for specific mobile banking apps on the phone, then lock it down and demand a ransom to unlock it. That might freak some people out, but it is more common than you might expect.
Such risks have the power to spook at least a portion of would-be mobile banking users, especially those who were already on the fence about whether or not to take the leap and adopt the fairly nascent technology. As things seem to be evolving, there are sure to be more malware threats that crop up over time, and the cynic in us wonders how they will affect current mobile banking use and future adoption rates.
Already research suggests that concern about mobile security is a sticking point when it comes to mobile banking adoption. A Fed study published in March found that 51% of smartphone owners had used mobile banking in the previous 12 months, up from 48% a year earlier. But among consumers who don't use mobile financial services, one of the primary reasons cited was concern over security. In fact, 69% of non-users cited security as a reason they hadn't yet taken the plunge either.
Consider that if the problem with malware becomes more widespread, we think it's likely that at least some portion of customers will need additional reassurances to keep using it. Keeping this in mind, now's probably a good time for community banks to step up efforts to educate customers about staying safe in a digital world. It can't hurt, it may protect your bank and customers will appreciate the fact you are watching out for them.
It's also a smart move for banks to take a proactive approach to ward off malware threats and to make customers aware of your efforts. A bank might, for example, to take the opportunity to get even smarter about mobile security by confirming they have installed the most up-to-date systems to keep cyber thieves at bay. Banks should also actively monitor for unusual mobile account activity, in the same way many keep a keen eye out for suspected credit card fraud or sketchy characters wandering into the branches.
Of course, nothing is full-proof and there will always be some level of concern associated with mobile banking. It is our very nature as humans to worry about such things. Online banking remains susceptible to hackers and there are still problems from time to time with customers getting their card information compromised, so keep working at it every day.
To get customers to embrace mobile banking wholeheartedly, we need to do everything within our power to protect sensitive information from threats and lessen the trauma of those who may experience negative events.