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How Mobile Security Works

        Money | Online Banking

Mobile Banking Security and Safety

It seems that Americans will do just about anything to avoid going to the bank. The proof lies in the overwhelming popularity of mobile banking. According to a September 2011 survey by the American Bankers Association, 62 percent of Americans prefer to do all of their banking online, up from 36 percent a year earlier [source: ABA]. And now most banks offer mobile apps to access the same services -- balance inquiries, transfers, bill pay -- on a smart phone or tablet. A few years ago, USAA became the first bank to offer mobile deposits, in which a customer snaps a picture of the front and back of a check with his or her phone and the funds are immediately credited to the account [source: Stellin].

SMS banking is a popular method of mobile banking, but can be less secure than using a mobile banking app. Incoming and outgoing SMS messages are stored on your phone, and a thief could potentially piece together your old messages to access your account. Banking apps, on the other hand, don't store any account information or passwords on the device itself. Also, banking apps communicate with the bank's servers using the institution's own encryption algorithms, protecting the integrity of data from device to bank account and back [source: Howard].

For the safest mobile banking experience, smartphone and tablet users should never save their passwords to online bank accounts in the device's browser. You should also refrain from conducting online banking sessions over public WiFi networks or any WiFi connection that may not be encrypted. Lastly, make sure to close all browsers and banking apps when your session is ended.

The good news is that banks like Wells Fargo and Bank of America have online banking guarantees that extend to their mobile users. These guarantees offer 100 percent fraud coverage as long as you don't do something silly like e-mail your Social Security number to a stranger from the Ukraine.

For more information on Web security and mobile devices, follow the related links on the next page.