Security of Smart Banking Applications in Slovakia

Abstract

(ProQuest: ... denotes formulae omitted.)1 IntroductionNowadays, in times of e-commerce and digital society, electronic banking is a part of everyday life not only in large enterprises, but also for small businesses and individual persons. In addition to the most common known form of direct banking-the Internet Banking, to the forefront gets its mobile equivalent- Smart Banking. This form of electronic banking is more suitable for smaller businesses or individuals that do not require the management of their accounts linked with the enterprise information system, or using this form for information purposes or one-time payments.The sharp increase of Smart Banking usage is natural and related to the rapid development of smart mobile devices, especially increasingly popular Android operating system, which offers a variety of applications and possibilities. However, behind the convenient application there might be some security issues hidden. Is the internet connection secure in smart devices? Are security settings of our devices adequate? What are the threats of misuse or theft of sensitive data used to access our accounts? Which applications are authentic? Is the application of our bank really safe? How does the change of system settings required by another application during installation affect the current security settings of smart device?Lots of users are unable to answer these questions. The aim of this paper is to analyze the security of Smart Banking applications in chosen Slovak banks and partly answer these questions. Furthermore, we also want to analyze issues of smart devices' security settings when using Smart Banking applications and specify parameters that affect the security of communication through smart devices when using these applications. The evaluation of these parameters introduce a security coefficient Kb on the basis of which we assess specific Smart Banking applications in the Slovak banks.2 Development of Smart BankingThe term of mobile banking is however a broader concept and from historical perspective the development of electronic banking forms includes services such as banking via Global System for Mobile Communications (GSM banking), banking via Wireless Application Protocol (WAP banking), banking via Short Message Services (SMS banking), Subscriber Identification Module (SIM) Toolkit banking, etc. The definition of mobile banking can be found in Bucko and Mihok [2] or in Stair and Reynolds [30]. Currently, the mobile form of electronic banking is the most dynamically developing form of banking in the Slovak banks. Its specific form - Smart Banking is called according to the device for which it is intended. With increasing popularity of smartphones and tablets, Smart Banking seems like a convenient solution to handle the necessary transactions and transfer orders.While using a smart phone, orders for payments or applications for loans can be placed. The development of mobile phones currently contributes to the improvement of other forms of electronic banking services, such as the Internet Banking, in which for example greater security is achieved by sending dynamically generated verification code via SMS.The number of clients using the direct banking services initially rose slowly. The reason was high cost and lack of trust in these services due to low security perceived by customers [32]. Nevertheless, the number of users' forms of electronic banking since 2005 has increased several times. According to Eurostat, roughly a quarter of the EU population uses electronic banking. The most active in this aspect are the residents of the Scandinavian countries and in the opposite there is the south of Europe, where the percentage of e-banking users is the lowest. The leader in the use of e-banking is Norway. From the post-communist countries, the Baltic States (Lithuania, Latvia and Estonia) are at the forefront of e-banking usage.Slovakia is in the lead of the V4 countries in electronic banking usage, but within the European Union in 2006 it was at 18th place. …