The good news is that mobile banking is actually safer, at least in theory, than online banking using laptop or desktop computers, which are far more likely than phones to be infected with malware [source: Roman]. But since mobile banking is still relatively new to the scene, banks are still learning how to manage the risks associated with banking apps [source: Gahran]. For instance, in a recent study by security firm viaForensics, 25 percent of the mobile banking apps evaluated received a "fail" rating, primarily because testers were able to retrieve passwords, PIN numbers or other personal information from users' phones [sources: Crosman; viaForensics].
In the not-too-distant future, our smartphones will feature built-in security features such as facial biometrics and fingerprint recognition to prevent access by anyone other than the phone's rightful owner [source: Fenston]. Until then, keep the following tips in mind to ensure that your mobile banking transactions are secure.
If you want to use your bank's mobile banking app, be sure to download it directly from the bank Web site, not from your phone's application store or a link that you follow in an e-mail. Select a strong password, and if you must write it down, store it somewhere safe, far away from your phone. Most importantly, avoid having your phone "remember" your login information or pre-fill the username and password fields.
If you want to use a third-party banking app that lets you monitor and interact with more than one account, take the time to research popular apps and select one that has positive reviews and a large number of downloads. Before you install any mobile app -- banking or otherwise -- be sure you understand what areas of your phone it will have access to. If the permissions seem excessive, consider whether you really need the application, and whether you understand why it needs to access the areas it does. Avoid using mobile banking apps or sending sensitive e-mails or texts over public or unsecured Wi-Fi networks; instead, use your wireless carrier's network.
Even if you don't use your smartphone for banking, it's a good idea to activate the screen lock function. Again, be sure that the password doesn't automatically pre-fill; you should be required to enter it every time. Be sure to delete any e-mails, text messages or documents containing financially sensitive information. Last but not least, install mobile security software such as Mobile Defense or Lookout (for Android) or MobileMe (for iPhone), which allow you to remotely "wipe" your phone, erasing all of your information in the event that your phone is ever lost or stolen.
The bottom line: Don't be afraid to enjoy the convenience of mobile banking apps, but proceed with caution. Know what you're signing up for (and who's providing it!) before you download a new application to your smartphone, and guard your phone as you would your wallet or your credit cards. Before too long, it may replace them both!