Protecting your banking apps from different security breaches amid the COVID-19 crisis has become the need of the hour. In this age of data breaches, you have to secure your business alongside your customer data.
Pandemic aside, it would still be a smart idea to reconsider your current security strategy. According to CSO Online, there is a 28% chance that companies will face one data breach incident within the next two years. Considering the devastating impacts of privacy breaches, you cannot rely on improving your network or device security to safeguard your apps.
Unfortunately, web and mobile apps are highly prone to cyber attacks. Hence, organizations – especially – especially financial institutions – are bound to take some extra precautionary measures to take the security of their apps to the next level.
Without such measures in place, traditional security steps like firewalls and antivirus software will not make much of a difference. Luckily, securing your apps from reverse engineering and tampering hassles is in your own hands, so you do not need to allocate a massive budget to overcome this problem.
Why are Banking Apps Vulnerable?
Banking apps’ architecture is one of the most severe vulnerabilities that can lead to breaches. An app is a piece of software connected to the bank’s backend system with the help of standards-based Application Programming Interfaces (APIs).
These APIs are typically open source, which is quite helpful for developers. On the other hand, they create security loopholes that cannot be solved or reduced by traditional security measures such as firewalls or web application firewalls (WAFs).
For instance, both APIs and mobile banking apps develop machine-to-machine and encrypted interactions on the network. Attackers can take advantage of machine-to-machine interactions by creating shadow APIs on their own. Ironically, these shadow APIs do not resurface as compromised endpoints, allowing hackers and cybercriminals to hide themselves by appearing as approved users since network filters are unable to identify them.
App ownership is divided
App ownership is another cumbersome factor when it comes to securing banking apps from data breaches. There are usually two owners: one who works for the bank, and the other one is an external owner.
In most industries, it is usually a Line of Business (LOB) manager who defines the software’s requirements. The development team is mainly responsible for creating it, and the IT Ops team has to deploy it accordingly.
As far as the banking field goes, Line of Business managers are the owners of the mobile banking apps. The IT department is another owner, and there is one external entity that has to develop the app and manage its APIs.
This kind of ownership creates issues from a security point of view because three owners are sharing the responsibility. There is a strong likelihood that something can go wrong anytime.
In case a security-related incident happens, there may be disagreement over who will resolve the issue.
Improper use of the mobile platform
Both mobile operating systems like Android and iOS, provide unique security features to their users in the shape of permission systems or TouchID. If you do not use them properly, you may face privacy threats as a consequence, opening your crucial personal data to hackers.
Data storage is insecure
Every app you use requires some space that allows it to store your data. The storage solutions, including internal storage, must be highly secure if you want to save your sensitive information. This step is the first line of defense towards data leak prevention.
If you are unable to secure your data storage, hackers can access your sensitive data and misuse it for their gains.
Communication is vulnerable
Mobile apps need to communicate with external data sources like NFC, Bluetooth devices, servers, and others. You cannot avoid this communication; otherwise, the app would not be able to perform to its potential. But, this activity can also leak your data.
Implications of PSD2 on Banks
The primary objective of PSD2 (Payment Services Directive 2) is to reduce fraud and malicious activities and enhance security for online payments. The law aims to strengthen the use of digital documents and increase digital security as well. Furthermore, PSD2 also supports the idea of open banking and competition within the financial sector.
The law compels banks to grant qualified third parties automated access to retail and corporate customers’ transaction accounts. PSD2 enables fintech, large corporate firms, banks, and customers to work in close coordination with banks as PSPs. Moreover, the law strives to provide much improved online security to consumers in terms of online payments and customer experience overall.
How Do You Prevent Banking Apps from Security Breaches?
Banks will have to apply robust security countermeasures to protect their apps from any data or security breach. Here is the list of best possible solutions that help bank secure their apps appropriately:
- Perform different tactics like continuous app scanning and vulnerability analysis to bypass data privacy problems within Android and iOS apps.
- From the users’ point of view, they should always secure their internet connections before accessing their bank accounts on their mobile phones, especially when using public Wi-Fi networks.
- Banks should include all the stakeholders during the app building and deployment process to understand the security flaws before the release of a banking app.
- Banks should invest in AI (Artificial Intelligence) to improve the security of their mobile banking apps. As a result, they can keep their mobile banking customers’ money safe and secure.
- Banks should protect their mobile platforms by implementing the best security practices.
- Banks should educate their customers in using mobile platforms securely.
- Banks should implement proper secure algorithms that allow them to secure the internal storage of their apps.
- Banks should protect their apps’ communication by applying communication security tools like effective encryption algorithms and others.
- Banks, customers, payment service providers, and other stakeholders should follow the PSD2 law to secure their online payment mechanisms using qualified certificates for website authentication (QWAC) and qualified certificates for electronic seals (QSealC).
Both banks and customers need to be on the same page when it comes to securing their sensitive financial information from various online threats. Banks should conduct app scanning and vulnerability analysis regularly to enhance their apps’ performance in terms of security and privacy and also ensure they are compliant with any data privacy guidelines and regulations, such as PSD2.
Likewise, customers should also secure their banking apps by installing mobile-based antivirus software and using VPNs that help them protect their financial information.