Beware of Cybersecurity Risks: Finance Apps for Budgeting

Americans are increasingly relying on financial apps to manage their finances, but experts caution that careful consideration is needed when choosing and sharing sensitive data with these applications.

According to researcher Creditnews, nearly three-quarters of financial apps analyzed share some user information with third parties. On average, these apps disclose about six types of data, including device IDs, names, email addresses, app interactions, and phone numbers. Some apps go further, sharing even more extensive data sets.

Due to the nature of the information handled by financial apps, they are attractive targets for cybercriminals. Each instance of data sharing expands the user’s data footprint, increasing the risk of theft. Stolen data can be exploited for financial fraud, identity theft, or even discriminatory profiling based on sensitive details such as race, ethnicity, health, and browsing habits.

Staying informed and discerning about data sharing practices is crucial, advises Creditnews analyst Sam Bourgi. To ensure the safety of personal information when using financial apps, experts recommend several precautions:

1. Reputation and Reviews: Opt for apps from reputable institutions with a track record of security, such as major financial institutions. Read user reviews to gauge other users’ experiences and trustworthiness.
2. Encryption and Privacy Policies: Choose apps that use end-to-end encryption for data transmission and clearly disclose their data-sharing practices. Check the app’s data safety section on platforms like Google Play before installation.
3. Security Measures: Protect yourself by using strong, unique passwords across different accounts and employing a password manager for convenience. Avoid clicking on suspicious links and use two-factor authentication or biometrics for added security.
4. Device and Network Security: Keep devices and software updated to benefit from the latest security enhancements. Avoid using public Wi-Fi networks that may be insecure. Set privacy settings to limit data visibility and enable remote wiping for lost devices.
5. Response to Compromise: Stay vigilant for signs of data compromise. Financial institutions and credit bureaus can alert you to suspicious activities, but promptly report any concerns to app providers and take immediate action to secure your accounts.

For added control over data privacy, tools like Consumer Reports’ Permission Slip app allow users to manage and restrict data sharing by mobile apps.

While financial apps offer convenience and efficiency in managing finances, users must balance these benefits against potential security risks. Practicing good digital hygiene and staying informed about evolving cybersecurity threats are essential for safeguarding personal information in an increasingly digital world.