The rise and rise of in-app banking

Written by on August 4, 2016 in Guest Blog with 0 Comments

The raging whirlpoolI very rarely use Internet banking these days and it seems I’m not alone. Almost every interaction with my bank takes place through one of my mobile banking applications: my Barclays banking application, my Barclays PingIt application (which I assume will soon disappear inside WhatsApp and Waitrose and Hailo and so on), my Simple application, my Barclaycard application, my American Express application and so on and so forth. Thinking about it, the only time I can remember using my home banking application in recent times was to search back through transactions to check on some payments on behalf of one of my kids at university and to set up a new payee for Faster Payments. Unusually, I appear to represent the man using the Clapham ISP in this respect, as the latest figures from the British Bankers’ Association show.

The number of internet banking logins made by Brits each day fell last year, as customers continued to migrate to apps, BBA research shows… The number of payments made using banking apps hit 347 million last year, a 54% rise. Internet banking still has the edge here, used for 417 million payments in 2015, but this was up just two per cent.

From Apps crush internet for UK banking logins

The BBC were kind enough to invite me to talk about this on Breakfast TV, because some of the members of the public that they had been talking to expressed concerns about the security of mobile banking. As this is a core area of expertise for Consult Hyperion (in fact, one of the biggest projects that we are working on right now deals with planning, executing and testing mobile app security strategy for one of the world’s biggest banks), I took the opportunity to reassure viewers that not only was mobile banking safe it was, in my opinion, much safer than internet banking. You can watch it here [at 25:50].

There are several reasons for this — the fact that the phone contains a smart card and tamper-resistant memory, the fact that the phone tracks you and (perhaps the most mundane of all) that if you lose your phone you notice fairly quickly — but the main point is that if you carry out any form of methodical risk analysis you will see that the mobile phone in essence offers a bundle of security countermeasures that work to reinforce each other. Of course we must be vigilant, but mobile security is doing OK.

Note also that mobile security extends across other channels: mobile is often used to secure internet login anyway. Right now this is often through the not-very-secure use of text messages but there are initiatives such as the GSMA’s Mobile Connect out there trying to introduce some real security.  This is where I expect to see further real innovation in the not too distant future and why I keep posting repetitive tweets about annoying internet logins and anticipating the advent of Apple ID. Since just about everything on the Internet is insecure, the obvious way to improve the security of end applications is to (essentially) ignore the Internet completely in security terms. Just assume that everything sent across the Internet has no defence whatsoever against even the most basic assaults on integrity, confidentiality and availability. In planning terms, assume that the Internet is owned and operated by your nemesis! Thus, everything that goes across the Internet must be encrypted and digitally signed.

If we are going to do this then we need a place to store the private keys that are needed to make the encryption and signing work properly. We can’t store them inside PCs because by and large PCs are just as insecure as the Internet. But since everyone has smart phone, a rather obvious thing to do is to store keys inside the tamper-resistant storage that the handsets provide. After all, if the “secure enclave” (Apple’s name for the ARM Trusted Execution Environment, TEE) inside your Apple iPhone is safe enough to store payment tokens then it is safe enough to store a variety of the virtual identities that I need to operate in the online world. I’ll blog about how this might work in the banking case later in week, but at this point I just want to re-iterate what I told the BBC. When it comes down to it, mobile isn’t as secure as web, it’s much more secure than the web.

This article was first published on Tomorrow’s Transactions.

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About the Author

About the Author: Dave is Director of Consult Hyperion, the secure electronic transactions consultancy and is an internationally-recognised thought leader in digital identity and digital money. Named in Wired magazine’s global top 15 favourite sources of business information; rated one of the NextBank “Fintech Titans”; voted one of the European “Power 50” people in digital financial services and ranked Europe’s most influential commentator on emerging payments. .


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