IT and Business Insights for SMB Solution Providers

Mobility: A Special Issue for Smaller Banks

Community banks are not yet on the mobile bandwagon as they struggle to balance customer convenience with privacy and security. By Lauren Gibbons Paul

If you work with clients in the financial sector, you may already be aware of the mobility pains afflicting smaller banks. While many of the nation’s largest institutions have already adopted mobile strategies, apps, and solutions, many local and regional banks haven’t.

As a result, they struggle to balance customer convenience with the need to maintain adequate levels of privacy and security. Helping community banks understand and meet this challenge represents a major opportunity for VARs, system integrators, and other channel partners.

Ori Eisen, founder, chairman, and chief innovation officer of 41st Parameter, a Scottsdale, Ariz.-based provider of fraud detection and prevention solutions for companies in the financial services industry and other verticals, says mobility presents new challenges for smaller banks.

“As mobile banking gets easier and its volume goes up, the threat of fraud will also increase,” Eisen observes. “Everyone involved, from risk managers to solutions providers, needs to work together to prepare for and prevent potential problems.”

In addition to exposing banks and their customers to the threats inherent in any browser session, mobile devices also complicate authentication, as they typically can’t store cookies or other identifiers.

Apps contribute an additional set of risks, including rogue remote deposit capture, look-alike apps used for phishing, and the difficulties of maintaining rigorous patch management practices.

To combat these dangers, Eisen suggests three actions:

  1. Investigate mobile authentication solutions for the banking industry to ensure that even cleverly cloned devices are detected and blocked before damage can be done.
  2. Implement an effective mobile security update and maintenance program so that legitimate customer devices are fully compliant with ongoing changes in policy and technology.
  3. Investigate HTML5 as a platform for mobile banking services to provide a potentially safer and more secure service delivery environment.

“[Security] concerns aren’t slowing consumer demand for deeper mobile banking capabilities,” says Eisen, “nor are they dampening the banks’ desire to give their customers what they want.”

The challenge is striking the right balance between convenience, privacy, and security.

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