Banks shouldn't rely on mobile SMS passcodes, security firm says

As mobile banking grows, malicious Android applications are increasingly intercepting one-time passcodes

A widely used security feature intended to protect access to online bank accounts is becoming increasingly ineffective, as cybercriminals develop advanced malicious software for Android devices, according to a report released Wednesday.

Many banks offer their customers two-factor authentication, which involves sending an SMS message with a code that's entered into a Web-based form. The code expires in a few minutes and is intended to thwart cybercriminals who have a person's login credentials.

But there are now multiple mobile malware suites that work in tandem with desktop malware to defeat one-time passcodes, wrote Ken Baylor, research vice president for NSS Labs.

"Do not rely on SMS-based authentication," the report said. "It has been thoroughly compromised."

Nearly all mobile malware is written for the open-source Android OS, which allows users to install any application, the report said. iOS mobile malware is rare since Apple forbids downloading applications that haven't been vetted by the company.

Cybercriminals use a one-two punch. Once a PC is compromised, the malware injects new fields or pop-up menus into the screen, asking a person's phone number and their mobile operating system type and phone model.

A link is sent to the phone, which if clicked prompts for the installation of malware that sends one-time passcodes to another phone, allowing someone to log into a person's bank account, the report said.

Much of the PC and mobile phone malware originates from countries that were part of the former Soviet Union. The malware developers focus on Android since it is widely used, and there appear to be few iOS specialists in those nations, the report said.

Well-known desktop banking malware programs such as SpyEye, Citadel, Zeus and Carberp all have a mobile Android component. Although Google patrols its Play store for malicious applications "a significant amount of malware escapes detection," the report said.

Financial institutions have been slow to keep up. As mobile banking continues to grow, their applications have security weaknesses.

"Many banks still operate mobile applications that are merely HTML wrappers rather than secure native apps," the report said.

The applications should be revised to "include a combinations of hardened browsers, certificate-based identification, unique install keys, in-app encryption, geolocation and device fingerprinting," it added.

Send news tips and comments to jeremy_kirk@idg.com. Follow me on Twitter: @jeremy_kirk

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags NSS LabsInternet-based applications and servicese-commercesecurityinternetmalware

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jeremy Kirk

IDG News Service
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?