The evolution of mobile banking has allowed consumers to take an anywhere/anytime approach to banking. According to American Bankers Association, 7 in 10 Americans have used a mobile device at least once in the past month to manage their bank account. Mobile devices allow customers/members to check statements, deposit checks, etc. whenever and where ever they are. Although this allows financial institutions to improve the customer and member experience, FIs need to ensure the risks don’t outweigh the rewards. To help mitigate mobile banking fraud concerns, it’s important to continually educate members/customers on mobile banking best practices. Here are a few tips to get started.
Rewards and risks of mobile banking
Whether banking online or via an app, there are pros and cons to managing financials on a mobile device. The anytime, anywhere approach to mobile banking is a huge reward for consumers. One such reward is not having to drive to your local FI and wait in line to handle transactions. With a smartphone or tablet, consumers can deposit checks, check their statements, and so much more.
With every benefit there are some negative aspects also, and mobile banking is no exception. For financial institutions, there is less engagement with their customers or members. Consumers no longer have to come in to their local branch, which can create a disconnect between financial institution and member or customer.
One big, important risk that consumers should be cautious of is accessing their financial accounts on public Wi-Fi networks. These hot spots (in coffee shops, libraries, airports, etc.) are vulnerable to cybercriminals. Mobile apps are not always properly encrypted. This could result in personal, sensitive information being accessed or retrieved by someone else. To avoid this, access your financial accounts on a secure Wi-Fi network. Always check to verify a website is fully encrypted.
Beware of duplicate deposits
Another important factor for both consumers and financial institutions to be aware of is duplicate deposits. Nearly half of mobile banking users have deposited a check with their mobile device in the past year and 59% of those users do so at least once a month.* When depositing checks via mobile app, it’s important for consumers to do two things:
- Place checks in a safe location
- Properly dispose the checks once they’ve been deposited in the account
Not only is it important for consumers to take the necessary precautions to avoid duplicate deposits, it is important for financial institutions to have the proper fraud prevention and security measures in place to monitor digital payments. TrueChecks will screen for duplicate deposits and alert an institution immediately if a check has already been deposited at this FI or another.
According to the 2017 ABA Deposit Account Fraud Survey report, mobile banking fraud has risen alongside the rise in popularity of all mobile apps. When offering the convenience of a mobile banking app and accepting digital payments via payment apps, it is vital that the proper security and fraud prevention measures are put in place. Here are the top 4, most common measures to reduce deposit account fraud for FI’s:
- Set a maximum dollar amount limit for mobile deposits
- Multi-factor authentication beyond user ID and password
- Alerts/notifications to customers and members
- Consumer education
- Make sure to use TrueChecks®, TrueCards® or TrueACH® with each applicable transaction to ensure no fraudulent or accidental duplicate deposits slip through!
