Finacle Blog

With mobile banking morphing into the much larger mobile-payment, involving any number of third parties, the risks got bigger, extending as far as money laundering and terror financing. M-payments, which can be classified as proximity or non-proximity transactions depending on whether the paying and receiving devices are physically located near each other or not, present different security issues. One of the key concerns of regulatory authorities, banks and other service providers is to safeguard stolen instruments so that they cannot be used to perpetrate identity or financial fraud. They are addressing this threat through the use of firmware such as security-enhanced SIM or memory cards. Other measures include better KYC regulation, compliance and identity verification by the banks’ agents.

Although mobile security is making progress, there isn’t yet a "one size fits all" miracle solution mainly because of enormous device diversity. Hence, banks and other financial participants in the mobile transactions chain will have to pursue a multi-pronged approach, at least for some time. Moreover, they cannot go it alone, and will need to collaborate with regulators, telecom operators and technology vendors to ensure that transactions are secured from the regulatory, networking and infrastructure angles.