Mobile apps for financial services are an important part of many consumers' financial lives, yet those apps are suffering a "vulnerability epidemic," according to a new report.

The report, commissioned by Arxan and produced by the Aite Group, looks at the perceived security of mobile financial apps versus the reality. And in many cases, to quote a movie title from 1994, "Reality Bites."

The report is based on research conducted by Aite Group researcher Alissa Knight that decompiled the apps to their original source code for vulnerability assessment. For many of the apps, that step started the list of vulnerabilities, since application shielding should prevent threat actors from decompiling an application to do their own vulnerability assessment.

"Mobile apps in general lack the necessary security features to protect users data. Even with social engineering and mobile breaches occurring more often, app developers still are not developing apps with security in mind," says Timur Kovalev, chief technology officer at Untangle.

Because the apps come from trusted financial institutions, consumers begin with the assumption that they are secure. "While users are comfortable using mobile apps for nearly anything and everything these days, the concerns for securing their money and financial information can make nearly anyone a little hesitant. And maybe with good reason," says Nathan Wenzler, senior director of cybersecurity at Moss Adams, a Seattle-based accounting, consulting, and wealth management firm.

Wenzler points out that the players in the market are broadly divided between traditional financial institutions which are known for their legacy of security but often have woeful inexperience with agile app development and newer online financial institutions that who have less experience in the regulatory and security requirements in the financial sector, but have access to modern secure development methods.

Those differences in experience and expertise are borne out in the critical vulnerabilities found in the mobile apps: Retail banking apps have the greatest number of critical vulnerabilities, while the greatest number of severe findings came from auto insurance apps, which contained the most hard-coded private keys, API keys, and secrets in their code.

Other common vulnerabilities found in code across all sectors are hard-coded SQL statements and hard-coded private certificates that a threat actor could easily replaced and code around. 

The most secure mobile financial apps are those of banks that offer and service health savings accounts (HSAs), followed by health insurer mobile payment apps, and credit card issuers. Whether their apps are on the more or less vulnerable end of the scale, Wenzler says that institutions across the industry know that they must improve application security. "No matter who is providing the financial services, everyone [in the industry] realizes what's at stake when to comes to their customers and their finances."

Kovalev says that financial services companies should improve the security performance of their own development organizations while working with other organizations to boost security even further. "It is critical that developers start taking app security seriously and that app stores like Google Play Store and Apple App Store enforce stricter security standards for apps that have access to such sensitive data," he says.

Wenzler is adamant that a failure to improve mobile financial app security could have huge consequences for banks and financial services companies. "Unlike many non-financial businesses, these banks won't recover as easily from a breach of trust over their customer's finances," he says. And those financial services firms supporting mobile applications have a huge challenge in front of them, Wenzler says, since most start from a position of relative insecurity.

"Making application security an integral part of the development and DevOps processes is critical to creating confidence within the customer base that their money and information is secure, no matter how they choose to manage their banking tasks," he says.

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