Analysis of NFC Technology Risks and Management in Banking Sector

This report examines the risks associated with Near Field Communication (NFC) technology in the banking sector. It begins with an introduction to NFC, its technical specifications (ISO/IEC standards), and its applications in mobile payment services, including Android Pay/Google Pay, Apple Pay, and Samsung Pay. The report then delves into the threats posed by NFC, such as relay attacks, malware, phishing, unsecured Wi-Fi, jailbreak threats, data manipulation, and man-in-the-middle attacks, illustrated through a case study on credit card attacks. It explores risk management strategies, particularly focusing on features of Apple Pay and Google Pay like secure components, proximity, EMVCo compliance, and HCE cards. The report concludes with a discussion of future research directions and the prospective growth of NFC technology in banking, emphasizing the increasing adoption of digital wallets and the potential for NFC to become a central payment method. The report also includes a literature review and references relevant research.

Running head: MANAGING RISKS IN MOBILE TECHNOLOGIES IN BANKING
Managing Risks in Mobile Technologies (NFC) in Banking
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2MANAGING RISKS IN MOBILE TECHNOLOGIES IN BANKING
Abstract
The purpose of this report is to analyze the risks of NFC technology in banking industry and
how the risks are managed. This report is concentrating on mobile technologies threats in
banking sector and how to manage these threats. The report presents technical specification
of NFC technology and a case study on NFC technology in credit card attacks in banking
sector. The NFC technology threats in banking sector are provided in this report. The
outcome of this report is how to manage the risks of NFC technology in banking sector
through payment wallet discussed in this report. The report concludes the future prospective
of NFC technology in banking sector.

3MANAGING RISKS IN MOBILE TECHNOLOGIES IN BANKING
Table of Contents
Abstract..........................................................................................................................2
Introduction....................................................................................................................3
Literature Review...........................................................................................................4
Technical Specification..............................................................................................4
Explanation about NFC..............................................................................................5
Explanation on Risk Management of NFC Technology............................................5
Future Research..............................................................................................................7
Conclusion......................................................................................................................7
References......................................................................................................................9

4MANAGING RISKS IN MOBILE TECHNOLOGIES IN BANKING
Introduction
The Near Field Communication (NFC) helps to establish communication between two
active electronic devices by bringing them close to each other. The NFC in banking is used
for mobile payment services to ease the hassle of payment physically. The NFC is used in
banking as a contactless banking cards for secure mobile payment through Smartphones. The
NFC provides several advantages in banking sector and they are security, ease of use and
protection from fraud in case of mobile is lost. However, there are risks also associated with
NFC technology.
Some major payment wallets used are Android Pay or Google Pay, Apple Pay and
Samsung pay. These are the major wallets used worldwide for ease of payment transaction.
Android Pay or Google pay is the digital wallet developed by Google to provide online
payment through Android Phones. Google Pay uses NFC technology in addition with two-
factor authentication and Host-based card emulation (HCE). Apple Pay is a payment wallet
service provided by Apple (Falk et al., 2016). This provides user to make payments via
IPhone and tablet. Samsung Pay is a mobile payment powered by Samsung Electronics. It
incorporates magnetic secure transmission for contactless payment services. The below graph
shows how the adoption of mobile wallet has grown in the recent years.

5MANAGING RISKS IN MOBILE TECHNOLOGIES IN BANKING
Figure 1: Graph for global mobile wallet market (2011-2018)
(Source: AMR Analysis and Primary research)
This graph shows how the mobile wallet market has grown in the recent years to
provide benefits to banking sector. This graph shows the growth rate of mobile wallet from
2011 to 2018 and it is growing continuously. The users are majorly using the mobile wallet in
recent years.
The structure of this report is literature review and future research. The literature
review includes description of NFC, risk management of NFC technology and comparison
between Apple automation and NFC.
Literature Review
Technical Specification
The technical specification of NFC technology as per the case study is as follows. The
Near Field Communication mobile technology is also called Contactless technology. The

6MANAGING RISKS IN MOBILE TECHNOLOGIES IN BANKING
Near Field Communication mobile technology has two primary specifications and they are
ISO/IEC 14442 and ISO/IEC 18000-3. The ISO/IEC 14443 describes the ID cards to store
data and ISO/IEC 18000-3 refers to RFID communication (Oliveira et al., 2016). The
ISO/IEC 18000-3 operates at 13.56MHz frequency in cards of Type-A or Type-Band to
utilize the mobile technology, the devices must be kept together within 4cm.
Explanation about NFC
The NFC technology is used as a payment service in banking sector where it provides
easy transaction of money through mobile. The NFC technology is used as a wireless
encrypted communication for short distances. The NFC is particularly designed to function
on Smartphones. The risks of NFC technology in mobile banking are that this technology ca
be easily abused and hacked (Shaikh, Hanafizadeh & Karjaluoto, 2017). The attackers can
easily communicate NFC based mobile banking from far away. The attacker can then use the
victim’s NFC based mobile banking cards to misuse the data. The risks involved with NFC
technology in banking sector are discussed through a case study in the next section.
Explanation on Risk Management of NFC Technology
The management of risks of NFC technology in banking sector is best described by
the following case study on analysis of credit card attacks in banking industry. The case study
focuses on the risks of credit card in banking industry using NFC technology.
The case study shows that there are major risks of NFC technology in banking sector
and they are described through credit card attacks in banking sector (Jumić & Vuković,
2017). The risks involved with NFC technology based credit card used in banking is because
of air as transmission mode used for transaction. The risks are relay attacks and unauthorized
card reading including eavesdropping, data manipulation and man-in-the-middle attack. The
relay attack is the most common attack which is done by the attacker. This attack refers to

7MANAGING RISKS IN MOBILE TECHNOLOGIES IN BANKING
exploitation of messages transfer in banking sector. Mobile Wallet malware threat occurs
when attackers fake digital wallet to dupe customers. The phishing attacks occurs when
attackers trying to obtain sensitive information such as customer bank details. The unsecured
wifi poses major threat when attackers try to attack directly without user’s knowledge. The
jailbreak threat occurs in Iphone when attacker gains root access of the documents to breach
the data on the mobile phone. The data manipulation is also a threat pose due to Near Field
Communication enabled mobile. This is because data can be manipulated by the attacker to
breach the data and directly attack the potential user (Dennehy & Sammon, 2015). This could
lead to ransomware threat to the customers. The man in the middle attack is also a threat
which results in major issue for customers and bank where third entity can act as an
authorized person. However, these risks can be managed through possible strategies.
Apple Wallet and Google Pay, both are payment wallets that provide payment via
mobile such as Iphone and Android phones respectively. Google Pay has been around from
longtime whereas Apple Pay has been a recent introduction and has made a bigger
recognition in the banking sector. The differences are that Google Pay works on almost every
android devices whereas Apple Pay is only for Iphones having higher versions (Ondrus,
2015). Google Pay requires lots of information for payment whereas Apple Pay requires just
a 16-digit number. However, both provide security as both uses NFC technology.
Apple Wallets and Android Pay or Google Pay are the digital wallets that has the
below features and specifications to overcome the risks or threats in Banking sector (Pandy &
Crowe, 2017).
 Secure component- The NFC technology in mobile is secured through use of
a chip that contains sensitive information and it is tamper-resistant. There is a
need of adding more security features such as tokenization and authentication.

8MANAGING RISKS IN MOBILE TECHNOLOGIES IN BANKING
Although, these additional securities are already in some mobile brands, but it
should be implemented on a larger scale.
 Proximity nature- The inclusion of proximity in NFC technology prevent
attacks as the attacks can be more difficult to operate and execute. This
ensures that attacker does not have any opportunity to attack the working of
banking system.
 EMVCo- EMVCo is used for facilitating global acceptance and
interoperability for securing mobile payment services in banking industry.
Hence, the organizations are working towards to develop EMV mobile
payments based on NFC technology.
 HCE card- HCE is referred to as Host Card Emulation is a physical card that
is used to store bank account information in cloud instead of device storage.
This technology is useful for making secure payment and in case when mobile
is lost, payment will be secured.
Future Research
The future scope of NFC technology is great and it is going to grow in future. The
NFC technology in the recent years has not only shown importance to use in banking sector
but also essential in coming years. The NFC technology has been adopted by digital wallets
and in future all other payment wallets are going to adopt this technology (Tan et al., 2014).
In future, NFC is going to take center stage where all payments will be done though NFC
enabled mobile payment. The banking industry is the major industry that has found benefits
of using NFC technology.

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Conclusion
Therefore, the above discussions conclude that NFC technology is a valuable
technology that has taken center stage in banking industry. The mobile payment wallets are
the next generation of payment services in banking industry. The different payment wallets
and prior researches on NFC technology risks are discussed in this report. The strategies for
managing those risks are provided through Apple wallets and Google Pay. Android wallets
and Google Pay provide solutions for managing risks of NFC technology in banking Industry.
Finally the future prospective of NFC technology and mobile payment wallets in banking
industry is provided and it shows that the future of NFC technology is great in banking
sector.

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References
Dennehy, D., & Sammon, D. (2015). Trends in mobile payments research: A literature
review. Journal of Innovation Management, 3(1), 49.
Falk, T., Kunz, W. H., Schepers, J. J., & Mrozek, A. J. (2016). How mobile payment
influences the overall store price image. Journal of Business Research, 69(7), 2417-
2423.
Jumić, J., & Vuković, M. (2017, May). Analysis of credit card attacks using the NFC
technology. In Information and Communication Technology, Electronics and
Microelectronics (MIPRO), 2017 40th International Convention on (pp. 1251-1255).
IEEE.
Oliveira, T., Thomas, M., Baptista, G., & Campos, F. (2016). Mobile payment:
Understanding the determinants of customer adoption and intention to recommend the
technology. Computers in Human Behavior, 61, 404-414.
Ondrus, J. (2015, August). Clashing over the NFC Secure Element for Platform Leadership in
the Mobile Payment Ecosystem. In Proceedings of the 17th International Conference
on Electronic Commerce 2015 (p. 30). ACM.
Pandy, S., & Crowe, M. (2017). Multi-faceted Evolution of Mobile Payment Strategy,
Authentication, and Technology.
Shaikh, A. A., Hanafizadeh, P., & Karjaluoto, H. (2017). Mobile Banking and Payment
System: A Conceptual Standpoint. International Journal of E-Business Research, 13.
Tan, G. W. H., Ooi, K. B., Chong, S. C., & Hew, T. S. (2014). NFC mobile credit card: the
next frontier of mobile payment?. Telematics and Informatics, 31(2), 292-307.