Mobile banking has become increasingly popular in Nepal, and for a good reason. It allows people to manage their finances on-the-go, making it more convenient and accessible. However, with this convenience comes perceived and financial risks. These risks include the fear of losing money due to careless mistakes, worry about not getting compensation from banks, and concern about the security of personal information.
To better understand these risks, a study was conducted by F1Soft, where participants were asked to rate their level of acceptability on several statements related to the perceived and financial risks of mobile banking.
What are the Risks of Mobile Banking?
Perceived risks refer to the potential threats and vulnerabilities that are associated with mobile banking, which may cause users to doubt its security and reliability. While mobile banking offers convenience and flexibility, there are still some financial risks associated with it. These risks include potential financial loss due to hacking or fraud, errors in transferring money, and lack of compensation from banks in case of loss.
One of the main perceived risks of mobile banking by participants in the study is the security and privacy of personal information. Users may worry that their personal and financial information is not adequately protected from hacking and eavesdropping, leaving them vulnerable to identity theft and fraud.
Other risks in mobile banking include the potential for fraud and OTP phishing, where customers get suspicious messages regarding winning a lottery, a job opportunity, or other offers that sound too good to be true, wherein they only have to share their bank account details to get access to the offer. This is one of the major risks in mobile banking.
There is also the risk of losing money due to errors that people are concerned about. While this is not in the hands of the mobile banking provider directly, a lot of people worry that erroneous transactions might cause loss that would not be recuperated adequately.
Overcoming the Perceived Risks of Mobile Banking
Despite the perceived and financial risks of mobile banking, there are several ways to mitigate them and enjoy the benefits of this convenient financial management tool. Here are some ways to overcome the perceived risks of mobile banking:
On the side of the service user:
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Educate yourself about mobile banking: Knowing the ins and outs of mobile banking can help you avoid common pitfalls and make informed decisions. Take the time to read the terms and conditions of your bank's mobile banking service, and familiarize yourself with the security features available.
Use strong passwords: Strong passwords add an extra layer of protection to your mobile banking account. Choose a strong password that includes a mix of uppercase and lowercase letters, numbers, and symbols.
Be wary of suspicious messages: Be cautious of messages asking for personal information or offering too-good-to-be-true deals. Such scams are very common in Nepal, including job scams, lottery scams, triangle scams, and more. Scammers often use these tactics to gain access to personal and financial information. Always verify the legitimacy of any message before providing personal information.
Keep your device and mobile banking app updated: Mobile banking apps and devices often receive security updates that help protect against new threats. Keeping your device and mobile banking app updated can help ensure that you are using the most secure version available.
Monitor your account regularly: Keeping a close eye on your mobile banking account can help you quickly identify any suspicious activity or errors. If you notice any unauthorized transactions, report them to your bank immediately.
On the side of the service provider:
Enable verification protocols to reduce erroneous transactions: Before a transaction is conducted, there should be protocols in place that check who the funds are being transferred to so that there is minimal chances of erroneous transactions.
Invest in a robust and round-the-clock support system: Mobile banking is available round-the-clock, which means that along with convenience, there is the chance of fraud or other suspicious activities happening round-the-clock too. A robust support system is necessary to address these concerns. This type of support also ensures confidence in mobile banking, and encourages people to use it more.
Ensure that the application is updated with the latest security measures: It is imperative that the service provider make sure that the mobile banking infrastructure is up-to-date, secure, and does not have many vulnerabilities to exploit.
Risk vs Reward
Mobile banking has brought about significant convenience and flexibility in managing finances for people in Nepal. However, as with any form of financial transaction, there are risks involved, both perceived and financial. The study conducted by F1Soft highlights some of the major perceived risks that customers face while using mobile banking, such as security concerns, fear of fraud, and worry about financial loss.
Nevertheless, as technology continues to evolve, the security features in mobile banking are also improving, and there are several ways to mitigate these risks. Users can take preventive measures such as educating themselves about mobile banking, using strong passwords, being wary of suspicious messages, and monitoring their accounts regularly. Service providers, on the other hand, can invest in a robust support system, enable verification protocols to reduce erroneous transactions, and ensure that their application is updated with the latest security measures.
Ultimately, mobile banking can be a safe and convenient way to manage finances if both users and service providers take the necessary precautions to mitigate risks. With the right steps taken, the benefits of mobile banking can outweigh the perceived and financial risks associated with it.
