FBI Says Sudden Increase in Mobile Banking Is Heightening Risks For Users

A recent surge in the use of mobile banking apps in the US prompted the FBI this week to warn smartphone users to be on the lookout for increased mobile malware and fake apps.

In a public service announcement Wednesday, the FBI's Internet Crime Complaint Center cited US financial data indicating a 50% increase in mobile banking since the beginning of the year.

With COVID-19-related social distancing mandates in place at state, city, and local levels, many more individuals have begun carrying out bank transactions — such as check cashing and funds transfers — over their mobile devices in recent months. Thirty-six percent of Americans, in fact, said they plan on using mobile devices for banking, and 20% said they'll be visiting physical bank locations less often, the FBI said, citing recent studies.

The FBI PSA pointed to app-based Trojans and fake banking apps as two big threats for new mobile banking users.

Individuals who are not cautious about where they download mobile apps from could end up installing banking Trojans on their phones or tablets that are designed to steal online account login credentials. Often the malware is concealed in or disguised as legitimate applications, such as games and productivity tools.

"When the user launches a legitimate banking app, it triggers the previously downloaded Trojan that has been lying dormant on their device," the FBI said.

The malware creates a near-identical-looking version of the bank's login page and overlays it on top of the actual login page in order to grab usernames and passwords as they are entered. The malware then often directs users to their banks' actual login page so they don't realize their data has been captured, the FBI said.

Malicious apps that impersonate legitimate banking apps are another major issue. Such apps often look and behave almost exactly like legitimate banking apps and are designed to steal account login credentials as well.

Kacey Clark, threat researcher at Digital Shadows, says the fake apps often contain dangerous permissions and are able to access sensitive information on the device or toexecute dangerous actions on a user's behalf. Many have the ability to read and write SMS messages, request authentication tokens, read contact lists, capture photos, and even add or remove accounts.

"When cybercriminals create fake apps to mislead users, they will commonly use exact brand imagery and a similar description to the legitimate app," she says. Users who are keen to get started on using the app can often gloss over important details like the developer name or the permissions that the app might request.

Heightened Risks
The risk of downloading malicious mobile apps is especially high on unofficial third-party app stores, but even legitimate stores are not totally immune.

"While official, public app stores deploy stringent verification processes to validate the legitimacy of their mobile apps, cybercriminals have been observed attempting to circumvent these checks," Clark says. To minimize risk, users are advised to visit the bank's legitimate website and download the app from there.

Mobile phishing is another fast-growing problem. A recent study by security vendor Lookout showed a nearly 67% increase in mobile phishing encounters among corporate users in the US. Many of the campaigns targeted mobile banking users. Lookout, for instance, recently uncovered threat actors using fake SMS messages to lure customers of major US and Canadian banks to malicious websites designed to steal their account credentials. Among those targeted were customers of HSBC, Chase, Scotiabank, and CIBC.

"The web pages were built to look legitimate on mobile, with login pages that mirrored mobile banking application layouts and sizing, as well as including links like 'mobile banking security and privacy' or 'activate mobile banking,'" says Chris Hazelton, director of security solutions at Lookout.

Lookout's research has shown that mobile users are three times more likely to click on a phishing link than on a desktop, Hazelton says.

The FBI urged mobile users — in personal and workplace environments — to only obtain their banking and other apps from trusted app sources or their companies' own mobile app stores. It also urged individuals to use strong passwords and enable two-factor authentication (2FA) where available.

When using 2FA for mobile apps, avoid using SMS, Hazelton says. "If your device has surveillanceware already installed, malicious actors can capture multifactor authentication tokens," he says.  

According to the FBI, individuals should consider using strong 2FA mechanisms where possible via biometrics, authentication apps, or hardware tokens.

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