Citigroup banking app security flaw

App has a security fault

It seems m-banking growth in the US has hit a bump; Citigroup Inc's free mobile-banking app for the iPhone has reportedly got a major security flaw that accidentally saves information, such as account numbers, bill payments and security access codes, in a hidden file on users' iPhones. If the phone has been synced with a computer, it is also likely that the information was transferred there too.

In a bid to prevent this issue, Citi have advised that all customers upgrade to a newer version that corrects the problem. However, the incident could highlight the problem of wireless security issues, a problem that has hampered the growth of mobile banking in both Western Europe and the US.

It is estimated that the issue affects approximately 117,600 customers who have downloaded the app since its release in March 2009.

Speaking to The Wall Street Journal, Citi said, "We have no reason to believe that our customers' personal information has been accessed or used inappropriately by anyone."

Apple have also reportedly advised iPhone users to download the updated app.

Growth of mobile banking

Mobile banking has taken off all over the world, especially in Asia, as people use smartphones for every aspect of their lives. For m-banking, the Citi Mobile app is currently the 11th most-popular offering in the finance category of Apple's App Store, that allows customers to check balances, transfer funds and pay bills.

It is definitely a growth market with approximately 18 million adults (seven percent of the adult population) using the service. However, security concerns have prevented the service from growing as fast as companies would like.

Chief among concerns is the prospect of "leakage" any time a wireless app logs confidential data. It is a concern that the Citi app has highlighted.

Although all customers have been informed and the glitch was discovered in a routine security review, it will set back m-banking back unless such security problems can be identified and fixed more rapidly.

Citibank, with an estimated 800,000 mobile customers, ranks number five in mobile banking, behind Bank of America Corp. at number one with an estimated five million users. In between are J. Morgan Chase & Co. with two million, United Services Automobile Association with 1.5 million, and Wells Fargo & Co. with 1.4 million.

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