Mobile Banking: The BasicsWith the popularity of online banking and the growing use of mobile web browsing, mobile banking is becoming an every day task for some people. Simply put, mobile banking is the use of financial services over mobile devices such as cell phones. Not all banking institutions currently offer this service - check with your institution to see if it does. But below is some basic information to help educate you about the possibilities - and risks -- presented by mobile banking.
Mobile Web Browser
The most common method of mobile banking is using a cell phone or PDA's web browser to access your bank's website. Similar to using a personal computer, a cell phone browser will allow access to a bank's login website for account maintenance.
Personal computers use SSL encryption to transfer sensitive information, ensuring it cannot be tapped or sniffed. Packet sniffing over wireless connections is still very common, though, and banking from a personal computer over a wireless access point, or hot spot, is not recommended. Be careful in public.
Cell phone and PDA wireless data is encrypted as it travels between cell towers. Though expensive and time-consuming methods do exist to decrypt wireless data, any sensitive information is still secured using SSL encryption, just like using a personal computer.
SMS / Text Messaging
Another method of mobile banking is to use SMS (Short Message Service), or text messaging, to receive account balances or handle other banking information. SMS messages are encrypted just like normal cell phone transmissions, and banking services offer SSL encryption for SMS as well.
SMS messages also travel through different servers than other cell phone traffic. Similar to email, SMS messages are handled by providers and are sometimes temporarily stored until delivery is possible. This intermediate step is different from standard web browsing, where communication happens directly between the server and client.
Online banking providers have worked hard to ensure that SMS banking is safe, but there is a slightly increased risk over using a web browser. Users should also take into consideration that, similar to email, SMS text messaging is prone to spam and phishing attacks.
Using mobile banking on a daily basis or handling large sums of money on your cell phone will increase your risk. Waiting until you get home or can get to a bank is always a safer option.
Mobile banking has come a long way and will become more common and time-tested as cell phones improve, just as online banking has.