Online Banking Security: The Current State of Technology With Online Banking Essay

Introduction

The trend of mobile banking has been on the increase since 2010 whereby the rate is increasing from 18% to 35%, and it is expected to grow by 50% in the next two years (Yee-Loong, et al., 2010). Online backing has eased the mode of cash transfer among American citizens and helped to save on time and cost. However, with the continued growth of online banking, technology has become susceptible to various major security vulnerabilities. For example fraud and account takeover. According to research lack of appropriate technologies to curb the online banking, vulnerability increases the risk of fraud among American bankers by approximately 35% (Casalo, et al., 2007). Therefore, there is a need for the online banking system to adopt strict technology measures.

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Technologies Used To Curb Online Banking Vulnerabilities

The online banking system has adopted various technologies that are aimed at reducing the risks or vulnerabilities involved in cash transfer. Some of the technologies that have been put in place include strong authentications, for instance, the two-factor authentication. This technology requires the online bank user to verify their identity using the mobile devices for the system to initiate the transfer of funds from one account to another. For example, in case the online banker wants to make money transfer, a message is sent to the user's phone number as a way of confirming the authorization (Aldas, et al., 2009). The SaaS companies have effectively adopted the two-factor authentication method, which has turned out to be effective in ensuring that their online banking customers are not affected by the vulnerabilities.

The Security Problems Banks Are Encountering With Online Banking

Despite online banking playing a major part in enhancing the mode of cash transfer, the banks are experiencing many security problems that are triggered by the online banking system. An example of the security problem experienced by the bank is the client authentications; which include the entity authentications and the transaction authentication (Aldas, et al., 2009). The online banks use various authentication mechanisms such as a password that can be easily hacked or in various instances; the clients share their authentication password. This results in illegal cash transfer from the client's account. The issue of authentications tends to be a security problem to the banks since in case of loss of the clients' money; the blame is in most cases directed towards the bank. For example, in the past one months, the digital bank Monzo received over fifty cases of customers who have reported fraudulent in their accounts. According to the banks' financial crime and security team, approximately 70% of the affected customers we noted to have used their cards with the same online merchants or frauds to authenticate transaction between within the previous six months (Casalo, et al., 2007).

Do You Personally Use Online Banking and What Is Your Perception of the Security Measures That You Encounter?

Yes, I do use the online banking system to either check my account balance or when making the cash withdrawal. The online banking system tends to be highly vulnerable to various security risks such as fraud. This tends to happen in case an individual shares his or her password or any other means of authentication. The security measures in place currently tend to be convenient in restricting the illegal fund's transfer as compared to the traditional measures.

References

Aldas-Manzano, J., Lassala-Navarre, C., Ruiz-Mafe, C., & Sanz-Blas, S. (2009). The role of consumer innovativeness and perceived risk in online banking usage. International Journal of Bank Marketing, 27(1), 53-75.

Casalo, L. V., Flavian, C., & Guinaliu, M. (2007). The role of security, privacy, usability, and reputation in the development of online banking. Online Information Review, 31(5), 583-603.

Yee-Loong Chong, A., Ooi, K. B., Lin, B., & Tan, B. I. (2010). Online banking adoption: an empirical analysis. International Journal of bank marketing, 28(4), 267-287.