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Mobile banking – and its threats – on the rise

Simeon ConeyThe unprecedented growth in mobile banking in Africa comes as welcome news to investors, telecoms providers, financial institutions and consumers. However, warns SIMEON CONEY, VP of Strategic Development, at AdaptiveMobile, the potential for fraud and abuse requires user education and operator engagement.

South Africa stands to emerge as the leader in mobile banking on the continent of Africa.

A recent United Nations Trade and Development Conference singled out how mobile technology can help trade and commerce, specifically benefiting the growth and sustainability of small vendors in South Africa.

Mobile is a natural medium for banking services such as money transfers, and the ubiquity of the mobile phone makes it easier to reach consumers, overcoming the challenges of limited ATM and bank property infrastructure in particular regions.

With this opportunity comes the challenge to protect users and the system from fraud and abuse.


While the specific financial transaction has safeguards built in, the potential for users to be misled by fraudulent “spoofed” messages exists, for example requesting sensitive information, or resend of funds to a different identity. Particularly susceptible are users who have not established a mistrust of electronic communication, gained through experience of PC-based email, or exposure to media education.

To create a safe environment, all parties involved must understand the threats unique to and inherent in the mobile environment. The mobile ecosphere is rife with a range of threats ranging from nuisances to fraudulent. The threats include:

1. SMS spam: Between 3 to 5 percent of all SMS traffic is spam.
These messages contain a broad range of content – from those designed to elicit a purchase to extraction of money or information from a user by faking an origin.
2. Mobile viruses: There are currently more than 400 mobile virus variants in the world. While some render a device useless, others are more sinister, designed to grab and send data stored on a device.
3. Malware: Malware targets corporations and consumers often charging a one time fee when users open a link or respond to an email.
4. Rogue applications: While not technically an intended threat, poorly written or rogue applications can create annoyances and damage a brand.

The mobile environment is different from the PC world in terms of protection. PC vendors use a bait and test method for viruses, spam and other forms of threats. This method is not feasible in mobile, given the need for handsets to be in active engagement with all user communities across the globe.

For this and other reasons, the mobile operator should be the first line of defense for mobile banking, to protect consumers and businesses as well as brand reputation and mobile transactions. Only the operator can filter a number of communications on a granular level to determine what is spam, what poses a real threat and which information can be released to which business. Working closely with financial institutions, the mobile operator can provide the level of security that will allow a seamless, safe mobile banking experience.

  • Simeon Coney has 18 years experience in the mobile, fixed line and IT infrastructure markets. Prior to joining AdaptiveMobile, he provided strategic guidance and portfolio management to a range of FTSE 100 and US companies. As VP of Strategic Development at AdaptiveMobile, Simeon’s responsibility is for the development and execution of partnerships globally.



One Comment, Comment or Ping

  1. Mobile payment systems is going to be one of the biggest hits in africa for operators who truly connect to the everyday reality of the consumers. Me2u airtime sharing service has been elevated to a mobile remittance system among families and friends in most markets in the region.

    The obvious next level is to progress this to a full-scale bank-supported, easy-to-use but very secure platform that make this another killer app
    The success of MPesa in Kenya is a learning for us all

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The Big Change is a business strategy blog and newsletter published by Arthur Goldstuck, managing director of World Wide Worx, a leading technology research organisation based in Johannesburg, South Africa.

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