Risks Associated With Mobile Banking


Mobile banking is the technology that enables customers to access banking and financial services through the use of their mobile phones. Since the use of mobile phones has greatly increased over the past few years, banks and financial institutions have set up mobile banking systems to allow customers to withdraw, transfer and deposit money to make banking more convenient and easier to access. Although mobile banking may offer benefits, there are also risks involved.

Mobile Banking Benefits

  • Mobile banking provides benefits for banking institutions and customers. It reduces the operating costs of a bank by eliminating the need for call centers to provide customer service. Also, it reduces payroll costs because fewer human workers are needed. Mobile banking is cost-effective to a bank, and advanced technology enables banks to efficiently monitor banking services. Fraudulent activity is also reduced because customers can receive instant updates of various transactions through their mobile phones.

Unsecure Information

  • There are some risks involved in mobile banking. Accessing financial services through mobile banking entails submitting personal information through a text messaging platform. Hackers can try to access those messages through unsecure Wi-Fi hot spots. Other risks involve the bank not investing in enough encryption security of its technology. This would leave the customer’s personal information open for interception.

Regulatory Issues

  • Banking institutions employ telecom agents to manage their mobile banking services. The use of independent or franchised telecom agents makes it difficult for a country’s central bank to regulate banking operations to have a universal set of standards. This means that different banks can establish different mobile banking rules, use substandard banking security software and charge high fees for mobile banking. These issues can cause customer confusion.


  • Banking institutions make sure that their channels are protected by a secure layer to ensure the safety of their customers’ information. However, some mobile phones are very vulnerable to viruses such as Trojans. These viruses provide hackers the opportunity to access your banking information through your mobile phone.


  • Some banks offer more security for financial services through their branches vs. their mobile banking platforms. Some banks do not offer mobile banking services due to implementation costs or simply the risks associated with investing in the platform. Other risks include loss of a customer's mobile device. Customers who lose or have their mobile phone stolen risk losing their financial information. This opens up the customer to the possibility of fraud.

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