Fraud experts have called on the finance industry to consider banning users deemed insecure or using jailbroken devices from accessing bank services remotely as the sector struggles to handle a sharp rise in electronic fraud.
While insecure transaction processes contributed significantly to electronic fraud, financial institutions were also fearful of insecure mobile platforms.
They were most concerned about users whose devices were jailbroken, exposing root directories and therefore allowing for the installation of applications as well as triggering of settings not authorised by Apple.
It turned on a string of services, such as remote access, not normally available on the mobile platform, making it easy prey for exploitation, particularly if users neglected to change the default root passwords made available for access when jailbroken.
Leanne Vale, a fraud and financial crimes manager with credit union industry body Abacus Australian Mutuals, said the sector would have to tighten control over consumers who accessed bank services from such devices.
“We are going to get to a recalcitrant point where [financial organisations] will say that if you have jailbroken your iPhone, we won’t offer you the service,” she said.
One major Australian bank reported that electronic fraud had doubled in the last nine months.
Fraud is estimated to cost Australians approximately $8.5 billion a year, according to the Australian Institute of Criminology. The divide between businesses and consumers on the figure remains unclear.
Vale said institutions could potentially move to ban customers repeatedly deemed insecure from accessing services via their mobile devices.
The concept would leave responsibility for client information security with customers themselves; a sea-change from the current situation in which banks soak up fraud costs.
However, Vale and her industry colleagues acknowledged the finance sector had failed to properly educate users.
“We have to rely on the AFP [Australian Federal Police], and the Today Tonights of the world to educate the public on mobile security", she said.
“Banks need to own this.”
The Teachers Credit Union was currently best at informing customers about mobile security, she said.
Fraud investigators for other major banks told SC they agreed with Vale’s comments.
“The message is that, rather than convince financial organisations that a phone is a computer, try a fresh approach," Vale said. "Ensure they know what it is, know what it does, and understand the risk and they put in mitigation controls."
The financial sector's discussions come as the Federal Government prepares to release a community cyber awareness whitepaper designed to help educate the public on electronic fraud.