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Online banking via smartphone: How to conduct banking transactions securely

banking on mobile device

Checking your account and making a transfer with your cell phone is convenient. Customers who carry out their banking transactions via mobile banking should nevertheless observe a few security rules. An expert offers some advice.

Actually, it’s not all that different from online banking – it’s just that the screen is much smaller. But you can conduct banking transactions just as easily with your smartphone as on the big screen. And because you can do it anywhere and not just on your computer at home, it’s called mobile banking.

How does mobile banking work?

If you want to use mobile banking, it’s best to install the app of your savings or checking bank. For advanced users there is also the possibility to organize their financial affairs via a multibanking app. The registration process for the app differs depending on the financial institution: Sparkasse customers, for example, must be activated for online banking in order to use mobile banking. Other than that, there are virtual banks that only work through apps (and websites), without any more physical branches. However, those are not always true banks, but rather financial services with certain licenses. However, some FinTechs with full banking licenses, so in this case it depends.

ING customers need iTANs to authenticate themselves on the move, while Targobank uses the access data from online banking. The apps guide you through the registration process, which usually involves setting a pin. It is also often asked whether biometric data, such as the finger scan, should be used as legitimation in the future.

Anyone who is unsure exactly what is expected of them should ask their bank. Once the registration process is complete, you can pay your bills, check your securities account, check your credit card statement and much more.

How secure is mobile banking?

The technology that banks provide is usually secure. Nevertheless, problems can arise with mobile banking, just as with online banking. Namely, when customers disregard the rules for safe Internet surfing. This basically starts with the purchase of the smartphone.

“Anyone who buys a used device should make sure that the previous owner has not changed anything on the operating system,” says Ms. Steffen from the German Federal Office for Information Security. These changes are called jailbreaks or rooting, and they result in devices being able to do more than the manufacturer originally allowed.

For example, apps that are not from the Apple app store can then be downloaded onto an iPhone. However, this also increases the risk of viruses on the device. However, Steffen knows that such changes can be seen in the settings and can often be undone by resetting the operating system.

How users can conduct secure financial transactions on their smartphones

It is also important to regularly update the operating system and banking apps. This is because security gaps are closed with the updates. “In addition, users should only install the banks’ apps from the official app stores so as not to download any fake apps, which fraudsters can then use to gain access to sensitive bank access data and the current account,” says Steffen.

As with your computer, you should log out of the app when you’re done with your banking, not just close the app. “While you’ll be logged out after a certain amount of time anyway, actively logging out makes the process more secure,” says the expert. Of course, all the other tips that you follow when banking online also apply – such as not passing on your access data and using a password that is as complex as possible or a code that is not too simple, such as 012345678.

What is especially important for mobile banking

You should also make sure that your smartphone locks automatically after a short time when you do your banking on your cell phone. Otherwise, unauthorized persons can use the device – possibly even to make purchases at the owner’s expense. “Anyone who has lost the device should have all access to bank accounts blocked,” says Steffen. Although fraudsters also need the access data to get into the account, but if these should be stored, for example, as a friend’s phone number in the cell phone, this can have consequences.

“That’s why it makes sense to block the accesses.” And another tip: “When you’re on the road, you should never be logged into an open WLAN when you’re doing your banking. Because access data can easily be spied out there.”

It’s different when you’re using a VPN, then your data traffic ist safe. By the way, if you are thinking about buying a new smartphone at some point, it is important to delete all data on the old device and then reset the smartphone to factory settings. Then even a new owner will no longer be able to access the log-in data for mobile banking.