6 Ways to Avoid Getting Scammed by Your Banking App
You work hard for your money, so it’s crucial that you make sure you are using desktop or mobile banking apps that protect your data.
Interest in financial technology (fintech) apps and online banking is growing as fewer people are visiting brick and mortar banks to access their bank accounts.
This has people wondering about the safety of banking apps. To answer this question, you have to know if the app you are downloading is selling your data. While you may be downloading apps to your computer, it’s more likely you are using them on your mobile device. Mobile banking is convenient and now pervasive.
In today’s digital economic environment, understanding data privacy policies and having an awareness of potential threats is becoming essential to protecting your consumer information and keeping it out of the wrong hands. Could that mobile banking app that has made your life easier, be harboring danger? It’s really up to you to understand as much as you can about online security.
Are Banking Apps Safe?
More people are mobile banking than ever, even if it’s just to check a balance. More than 75% of Americans use a mobile device to see how much they have in their bank account. This has a lot to do with social distancing because of the pandemic and the convenience of banking on the go, but it also has a lot to do with the rapid development of fintech apps that can perform a number of financial transactions.
In fact, according to recent surveys 50% of Gen Z adults start investing before the age of 25 due to the increase in availability of investing apps. And then there is an entire fleet of crypto trading apps as well.
Cybersecurity experts agree that mobile banking is both convenient and safe, but consumers need to take precautions. You may not think that someone could be spying on your mobile banking activity, but potential vulnerabilities in code and encryption methods used by popular fintechs can happen. It’s also possible that network vulnerabilities, like your WiFi connection, can leave your device open for others to exploit.
While identity theft is on the rise, that’s not all you have to worry about. Most of the time when apps sell your data to third parties, the information is used to adjust their marketing algorithms and understand more about their audience, especially mobile banking habits.
Most Apps Track Your Data
What you need to know is that 80% of apps track and store your data for a variety of reasons. If this personal information was passed on to a scammer, then you could be victimized or risk a security breach.
In fact, according to recent research conducted by Freshbooks, 1 in 10 adults in the United States fell prey to COVID scams last year, costing a collective $670 million.
COVID scams have become a much larger threat due to the fact that they can be realistic looking (especially phishing emails), while also employing urgent language and fear tactics. Most will also eventually either ask you to share your banking information or financial details, or if opened, will run malware that will compromise your financial security on your device. Some of these scams were tied to stimulus money provided by the government to offset job loss and other financial hardships due to the pandemic.
Needless to say, ensuring your favorite mobile banking app is kept secure against hackers is crucial. Let’s discuss how to achieve that.
6 Ways to Ensure Safe Online and Mobile Banking
1. Only Download Verified Banking Apps
Many banks and fintechs are proud of their apps, so they will often tell you everything you need to know about their apps on their websites. If they don’t provide info up front and simply tell you to download their app — be wary. It could be a fake and one of the internet’s biggest threats, financially speaking.
A real fintech app will have detailed information about its features, operating systems required, and whether or not your money is FDIC insured. Make sure to use a reliable app store and never download an app that you found on an open forum or from a text message.
2. Use Two-Factor or Multifactor Authentication
Using two-factor or multi-factor authentication can help keep your money secure in case your login info gets into the wrong hands. These authentication processes require more than just your username and password and help the company and you deal with cybersecurity issues.
You’ll also have to confirm your identity according to the settings that you establish, usually in the form of a text message sent to your phone with a one-time code that has an expiration date. If your banking app does not offer at least two-factor authentication to protect sensitive information, you should reconsider.
3. Actually, Use a Strong Password
It’s annoying to have what seems like millions of distinct logins for a variety of accounts. But, having a strong password is successful at keeping fraudulent activity at bay. To take it a step further, don’t ask your browser to save your passwords for you. Instead, use a password manager that keeps your passwords secure through encryption.
4. Avoid Public WiFi When Possible
If you get a warning that says the network you are on is not a secure network, then you should be concerned that others might be able to watch your online actions — including finding out personal details that can be used to gain access to your social media, email, and fintech apps.
Using public WiFi is convenient, however, you shouldn’t use it to check your bank account or conduct other financial business if you can avoid it. Mobile banking is our way of life, but don’t take security risks.
5. Set Up Alerts or Push Notifications
Many apps will ask users if they want to allow notifications for various types of activity on accounts. If you receive a lot of payments or make several purchases it might seem like all these notifications do is clog up your inbox, but these notifications can play a significant role in detecting potential fraudulent activity on your accounts.
For example, if you receive a notification that your card was used to make a purchase while you’re at home on the couch then you know someone has your banking info and you can address it with your bank ASAP.
6. Be Mindful of Other Apps You’re Downloading
Even if your banking app is with a reputable bank and you are taking every precaution to keep your personal data safe, your money could still become compromised. There is a certain malware that can be hidden in the code of apps that have nothing to do with banking at all.
These sideload apps downloaded from unofficial sources could be carrying a malicious program that hides in the background on your device and waits for you to open a banking app. The malware then creates a fake overlay mimicking your app’s login page where it then steals usernames and a password after it is entered. So become aware of the different landing screens that your banking app uses so that you can spot a potential fake and avoid this kind of attack.
It’s also a good idea to make sure that you have an insurance policy in place to help cover your assets in case your information does get compromised and you fall victim to a scam. While it is another expense, it can help you recover in a timely manner from a major financial loss
Across all generations, people are changing how they interact with their banks. Online banking started years ago but use of banking apps has accelerated since March 2020, the start of lockdowns and social distancing because of the pandemic.
Instead of going to the bank to make deposits, open accounts or make payments, people are using fintech apps that have the technology to bring the bank to the palms of their hands. While there are some risks involved with downloading free apps and software, mobile banking and fintech apps are generally safe, as long as you make sure they are from a reputable source.
However, there are malicious people willing to pay for your information to carry out subsequent scams . For stress-free banking, keep these tips in mind the next time that you go to download a fintech app to ensure that you are being conscientious about who you share your most private information with.
New York contributor Kiara Taylor specializes in financial literacy and financial technology subjects. She is a corporate financial analyst who also leads a group affiliated with University of Cincinnati that teaches financial literacy to Black students and helps them secure employment and internships.