Enhancing the security of mobile banking apps is one of the many applications of blockchain technology in the modern banking industry.
FREMONT, CA: As banking services become mobile, stakeholders in the industry are looking at all possible opportunities to build robust platforms that are optimized against security attacks. While anti-virus and firewalls do extend some protection to mobile banking apps, they are not foolproof in the face of sophisticated and targeted attacks. On the other hand, the seemingly unconventional technology of blockchain offers promising opportunities for bolstering the security of mobile banking applications. The following list mentions some ways in which blockchain can augment mobile banking security.
• Eliminating the Passwords
Today, mobile banking apps deploy a host of verification and authentication tools that range from passwords and pins to biometrics. However, the intrinsic loopholes present in smartphones make these capabilities unreliable. With blockchain, transactions on a mobile banking app can be made through a Secure Sockets Layer certificate, which rules out external intrusion. Only the two parties involved in the payment can consent to the transaction. With this alternative from blockchain, banking apps can eliminate the need for passwords.
• Security of Decentralized Platforms
One of the unique aspects of blockchain technology is that it allows for decentralized operations. Unlike conventional banking operations where the bank becomes the central regulator of transactions, blockchain-based apps allow consenting parties to carry out transactions in a decentralized manner. As a result, nobody has the authority or the opportunity to tamper with recorded information.
• Reduced Fees and Increased Transparency
As processes become decentralized, there is sufficient scope for automation. This helps banks reduce overheads. Consequently, banking fees reduce. Even for overseas transactions, the fees become nominal. Apart from that, blockchain also ensures data transparency on mobile banking apps function owing to the immutable ledgers.
As blockchain enters the banking domain, it is imperative for service providers to deploy it and take mobile app security a notch higher.