In the competitive world of personal finance banks are continuously looking for new ideas to gain a small commercial advantage over the competition. Consequently, we have seen the introduction of internet banking and more recently the conduct of transactional banking on mobile phones. Into this crowded arena the Commonwealth Bank ofAustraliaannounced this month its intention to launch a new service by the end of the year that will allow its customers to bank through Facebook. Customers will be able to make payments to friends, including to their mobile phones or email addresses, transfer funds and to check current account balances and transaction histories through the popular social media application.
This is an interesting development, particularly in view of customer concerns relating to personal privacy on social media sites, and one that should cause concern for the security of personal account details. It is also being launched during a period where financial institutions have seen a dramatic increase in the level of cyber-crime, both directly against bank infrastructure and in the form of fraud against bank accounts. Customers will already be used to blunt forms of phishing but cyber-criminals are becoming increasingly adept at collecting personal information through social media forums and “cyber-grooming” targets to obtain bank account details.
The greater rewards and lower risks of cyber-crime have also encouraged criminals to develop increasingly sophisticated forms of attack, including applications that are good enough to fool the experts. There are specific legal remedies available but these do not act as a deterrent, and the low risk of getting caught together with the high return on investment have encouraged criminals to industrialise the processes involved. After all, why rob one person when you can rob an infinite number at the same time?
Last year Microsoft had some success using legal remedies to disrupt these criminal activities, but the process is long and slow. It is still not a level playing field in an environment where criminals can hide behind false identities in foreign jurisdictions, but it is a step in the right direction. And by reversing the tactics of the criminals banks, businesses and even individuals can hope to restore equilibrium and make the internet a safer place to bank online.
Perhaps, therefore, the idea of banking through social media is not so risky after all!