Is mobile banking the most secure way of banking yet?

In the world of security there is often a tendency to accentuate the negative. This can often be justified. Malware can lead to data/identity theft and financial fraud and a DDoS attack can create havoc by denying access to a web site or service etc.

However, security can also be a positive factor – an enabler. For financial services, each time we use our debit or credit cards in an ATM or POS terminal in a retail store or use them on an eCommerce website we have a fair level of assurance that all parties are protected from fraud - where would eCommerce and financial transaction integrity be without cryptography?

Security technology coupled with sound risk management has been at the heart of the financial services industry for many years. This combination of security technology and risk management must be applied to new methods of providing financial services to bank customers including one of the hottest channels for providing financial services – Mobile.

Mobile devices, from feature to smart phones and from tablets to phablets, have become a vital endpoint for accessing banking services. The mobile banking channel is viewed as one of the most important channels for delivering financial services to bank customers. These are the same bank customers that are rapidly adopting these ‘smart mobile devices’ and are using them as their primary digital device – the first screen for consuming work/leisure digital content.

With the rush to mobile by financial institutions for banking and payment services there have been serious questions asked on whether mobile is secure enough? There is no denying that smart mobile devices are increasingly being attacked for financial fraud and identity theft. A combination of platform vulnerabilities and an increased desire from hackers and fraudsters to attack has led to a situation where mobile devices are under threat. Mobile malware is on the rise, especially affecting Android, and banking services, including some mobile-based Two-Factor-authentication (2FA) services, are under targeted attack.

Much has been commented on mobile vulnerabilities and whether security vendors are creating scare stories to make mobile users install their products but my experience tells me that much of this is not FUD but FACT. As money moves onto mobile devices than it is inevitable that the criminals will follow.

This has to be one of my favourite quotes (although the quote may in fact be an urban legend) and I apologise for repeating it again here but it is such an important message and provides context for this blog. One of the US’s most prolific bank robbers from the 1920s to the 1950s was a man named Willie Sutton (AKA “Slick Willie”). In his 40-year ‘career’ he robbed over one hundred banks and stole an estimated $2 million (a big number in old money). When asked why he robbed banks he replied “because that’s where the money is”. Why is this important to today’s ever mobile world? Well I think it is pretty obvious. Soon there will be more mobile phones than people on this planet and every one of these devices has the capability of banking (including full transactional banking). From the streets of Nairobi, Kenya, to the avenues of New York, USA, people are accessing their bank accounts and transferring money using mobile devices – be it an old Ericsson ‘brick’ or the latest Apple iPhone; using SMS or a mobile App. Its where the money is…

So, is mobile banking a secure method for banking and is it the most secure yet? I believe that mobile banking has the ‘potential’ to be more secure than traditional online banking and comparable with other banking channels. Whether current deployments of mobile banking are secure enough at the moment is another question. The key word is ‘potential’. Mobile phones and smart mobile devices have the capability to offer very good levels of security for banking purposes. Whether it is leveraging the hardware security capabilities and trusted environment that the Secure Element (SE) offers or adopting strong mobile-based Multi-Factor Verification (MFV), mobile devices can play an important part in ensuring trust between the bank customer and their bank.

In a recently published report from Goode Intelligence written by Ron Condon, Senior Analyst, “Mobile Banking Security Insight Report”, we investigate the risks to mobile banking, how banks are securing the mobile banking and analyse the state of security for this channel.

We have interviewed some of the leading lights in the world of banking security and have asked them to recommend ways in which mobile banking can be a trusted channel for financial institutions – actionable steps that banks can adopt to ensure that their customers are secure when banking on their mobile devices.

I can share some of this advice here. When designing and deploying mobile banking solutions financial institutions should, at a minimum:

1. Use the power of the mobile phone to create an encrypted communication channel between user and bank
2. The phone’s “fingerprint” should provide one factor in authenticating the users (the PIN provides another)
3. Consider using the other facilities on the phone for stronger authentication (biometrics, geolocation)
4. Monitor apps stores for any rogue apps that purport to represent your company – and kill them quickly
5. Introduce a plan for updating mobile banking apps
6. Ensure that mobile banking apps are security tested
7. Integrate mobile apps with other banking channels, so that security lessons learned in one channel benefit the others
8.  Educate users about system hygiene when upgrading their handset, and disposing of an old one

I hope this blog has been useful for you? Please feel free to contact me to find out more about mobile banking security and our research. You can follow us on twitter @goodeintel.

Lies, damned lies, and statistics… What do statistics tell us about the real risk from mobile malware?

The Evidence

Mobile malware, in particular Android mobile malware, is rising. This is a fact.

It has been rising slowly since 2004, as the figures below from McAfee detail, and the rate has been accelerating since autumn 2011 when a number of high-profile cases of Android mobile malware hit the press. This included Google’s official Android Appstore, then called Market now called Play, being used as a method to distribute Trojanised apps to unwitting customers. GGTracker [1], SuiConFo [2] and RuFraud [3] were all Trojanised Android apps that were attempting to defraud consumers largely by attacking the Premium Rate Service industry through the unauthorised sending of Premium Rate SMS messages.

Mobile Malware Explodes, Increases 1,200% in Q1/2012

Source: McAfee Threats Report: First Quarter 2012

“A comparison between the number of malicious Android application package files (APKs) received in Q1 2011 and in Q1 2012 reveals a more staggering find — an increase from 139 to 3063 counts.” Mobile Threat Report Q12012, F-Secure Figures from Goode Intelligence’s annual mSecurity survey back this up with a rise in the number of reported mobile malware incidents – read infection – in the workplace from 7% in 2009 to 24% late in 2011; nearly a quarter of all organisations. This figure is alarming. GI mSecurity Survey: Has your organisation experienced a mobile malware incident? We are also seeing evidence from other sources including telecommunications regulators. In the UK, the country’s premium rate regulator, PhonepayPlus, has been involved in investigations into premium rate fraud directly caused by mobile malware. With the assistance of Goode Intelligence, (providing research and analysis into the link between mobile malware and PRS fraud), PhonepayPlus are proactively tracking instances of mobile malware that are attacking PRS. One of these investigations hit the news recently and resulted in a hefty £50,000 fine for a mobile aggregator, A1 Aggregator Ltd based in Latvia, for managing the SMS shortcodes that were used in the RuFraud malware attack. From late November 2011, after receiving 34 complaints from consumers of unauthorised PSMS charges on their phone bills, including an individual losing around £80, the regulator investigated further and tracked the fraud down to Trojanised versions of Android Apps distributed via Android Market (Play). The fake apps included Trojanised versions of Angry Birds Assassins Creed and Cut the Rope. Consumers had no knowledge of three PSMS messages being sent every time the Trojanised app was started. Each PSMS message was costing the unwitting user £5.00. In this one case 1,391 mobile numbers in the UK were affected and an estimated £27,850 worth of fraud was attempted. Due to the swift action from the regulator, the shortcode was suspended and none of the £27,850 of UK consumer’s money was able to reach the fraudsters. PhonepayPlus found evidence of the RuFraud Trojan operating in 18 countries.  Thankfully the UK has a regulator that is well advised and has put into place procedures to ensure that this emerging area of PRS fraud is actively monitored. What about the other 17 countries that were targeted by this malware? How many consumers have been affected and how much financial damage has been done in regions where regulation is not so proactive? The Risk There is evidence from multiple sources, including our own, that mobile malware is rising and it is targeting consumers for, amongst other reasons, financial fraud. On the face of it, it seems that the risk of malware infection is getting stronger and both consumer and enterprise mobile users should take preventative measure to counteract that threat. These preventative measures include being cautious when downloading Android apps from appstores, including Google Play and from third-parties, and checking the permissions carefully. There is also the option of protecting your mobile device with a mobile security product that is proven to be effective in preventing mobile malware. Android is being targeted as it has a more open platform for downloading and installing apps and it is becoming the number one mobile platform around the world. This makes it the number one target for malware in today’s mobile market. However, we should also be cautious in assessing the current risk to both consumers and enterprise users from the threat of mobile malware. Apple’s iOS has been free of malware and there have been very small numbers of malware that have been known to affect BlackBerry devices.  Additionally, Google should be applauded in acknowledging the threat from Trojanised apps in Play by deploying a solution, Bouncer [4], which attempts to detect mobile malware on upload. Bouncer was announced early in 2012, although it has been running during 2011, and it is probably too early to state how effective the solution is in preventing mobile malware on Play [5]. There is also an acknowledgement from third-party Android appstores that security is important as a business differentiator. Goode Intelligence surveyed a number of the third-party appstores and was pleased that over two-thirds of the respondents (68 percent) replied with a ‘yes’ to the question “Do you think there is a commercial benefit for an app store to offer malware detection and prevention technology?” The tools are available for these third-party Android appstores with AVG [6] amongst the vendors offering specific security solutions aimed at preventing the spread of malware from these appstores. Yes the statistics do tell us of double and triple digit growth in mobile malware, mainly targeting the Android platform. However, the risk is still relatively low and the financial fraud that is being committed as a result of mobile malware is currently low in value. These are still early days in the history of malware targeting mobile platforms and indications are that the business drivers for attacking these platforms is growing which could result in the situation getting worse – especially in the short-to-medium term. And in answer to the question of attacks on Apple iOS, will this happen? You betcha! As the famous US bank robber, Willie Sutton, said in response to the question why he robbed banks; "because that's where the money is." Whether they will succeed is another matter and the topic for another blog. Alan Goode May 2012

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[1] Google’s Blog announcement on Bouncer http://googlemobile.blogspot.co.uk/2012/02/android-and-security.html

[2] Although this article from Andy Greenberg on Forbes questions how effective Bouncer is: http://www.forbes.com/sites/andygreenberg/2012/05/23/researchers-say-they-snuck-malware-app-past-googles-bouncer-android-market-scanner/

[3] Press release in the partnership between AVG and Livewire: http://www.avg.com.au/news/Livewire-Mobile-partnership/

[4] Covered by Lookout Mobile Security in this blog: http://blog.mylookout.com/blog/2011/06/20/security-alert-android-trojan-ggtracker-charges-victims-premium-rate-sms-messages/

[5] Covered by Denis Maslennikov of Kaspersky Labs in this blog: http://www.securelist.com/en/blog/208193261/SMS_Trojans_all_around_the_world

[6] Covered by Lookout Mobile Security in this blog: http://blog.mylookout.com/blog/2011/12/11/european-premium-sms-fraud/