Is Your Smartphone Already Hacked?

By Tony Rizzo December 03, 2012

Crossbeam Systems, a security platform provider of high-performance networks, released new research today that directly suggests that any sort of compromised security – far more than high monthly fees – will likely prove to be the single greatest catalyst for triggering users to change mobile network providers. Intuitively, that would seem to make sense, but traditionally, even when a mobile services provider experiences high levels of churn (in one-off situations such as failing to deliver a hot new phone model) in truth that churn doesn't usually add up to very large numbers of subscribers moving elsewhere.

But a new independent survey of smartphone users, commissioned by Crossbeam and conducted across the U.S., United Kingdom and Germany by market research firm Opinion Matters, strongly suggests that security issues are a whole other story. More than 1,000 adult smartphone users were polled in each country to examine usage habits, the importance of mobile security and data services, purchasing considerations, and especially what would motivate them to switch providers.

Image via Shutterstock

The findings are very interesting in that they essentially underscore what is more or less a common industry truth - most smartphone users don't think about security issues up front. In fact, based on the survey results it's clear that a vast majority likely pay no attention to the issue of security - until it’s too late. Here is the telling statistic:

  • 63 percent of global respondents, according to the survey, cite high monthly fees as the primary issue that would drive them away from their current mobile network provider (though we also know that most users will not in fact switch providers due to monthly fees - regardless of how users may think about it "theoretically").
  • Only five percent of all global users actually cite a lack of security as a reason for considering a switch in the service provider as a matter of expectations ahead of any security breach. This is certainly in line with what we generally know to be the case - and underscores that security is clearly not a priority issue of any sort for most smartphone users.

The numbers above change dramatically, however, if there is an actual security breach. If survey respondents' smartphones were to be compromised by hackers, malware or other security failures:

  • 55 percent would immediately consider changing providers and a significant 19 percent would definitely change providers – which means that a grand total of 74 percent of customers would be at stake.

Minor security breaches likely would not lead to such an exit, but a much larger breach that ultimately resulted in a "headline grabbing" issue would clearly leave a mobile services provider at very large risk of significant customer turnover.

Through its X-Series security platform, Boxborough, MA based Crossbeam looks to meet the extreme performance, scalability and reliability demands of large enterprises, service providers and government agencies. X-Series provides an open, high-performance architecture that provisions and scales multiple best-in-class security applications to meet ever-changing threat landscapes.

The company notes that the 74 percent finding challenges network providers' conventional thinking about their investment priorities, with most aggressively focusing on building ever faster high-speed network infrastructure and attractive data plans, but much less on shoring up their security infrastructure. Value-added security services and protection to end users and their devices would prove to be useful investments - and making such services highly visible should be a priority for any mobile services provider. Clearly, mobile network providers will be blamed for smartphone attacks, regardless of where the fault might ultimately sit.

"Smartphone users, like most people, don't think about the security of their devices until they've been hacked. This may be misleading mobile network operators to focus less of their attention on customer security and underestimate the risk it creates," says Peter Doggart, senior director of global marketing at Crossbeam. "There is an inadequate level of investment in security compared to other areas of the mobile network. The survey results are - or should be - a wake-up call for service providers, especially as we're reaching a critical mass of smartphone users worldwide, not to mention the growth of data-enabled endpoints connecting to mobile phone networks, including smartphones, tablets, e-book readers and more. The quantity of threats directed at mobile devices and their level of sophistication are on the rise."

As we noted, making smartphone security services highly visible will be critical. According to survey results, 56 percent of global respondents said they did not know if their mobile network provider has measures in place to secure their smartphone. Despite this uncertainty, 42 percent of U.S. and 38 percent of U.K. smartphone users would still blame their network provider if their device or service were to be hacked, while 22 percent of U.S. 18 percent of UK customers would blame their smartphone manufacturer. This underscores that users do not believe they have the responsibility for securing their devices, a key issue.

German smartphone users are much less likely to blame their network provider; almost half (45 percent) say they would blame themselves before their provider, 21 percent said they would be just as likely to leave their provider as their U.S. and U.K. counterparts following a security breach. This is despite the fact that 47 percent of German respondents claim to have security countermeasures (i.e., antivirus software, firewalls, etc.) installed on their smartphones – significantly higher than both the U.S. (35 percent) and the U.K. (26 percent). Mobile network providers will ultimately still be held responsible by their customers after a hack.

"The results indicate that mobile network providers will be blamed, regardless of who's at fault," continues Doggart. "This more than anything reveals an important opportunity for providers to be proactive about securing their networks in order to gain customers and minimize churn. As smartphone attacks become more prevalent, the service providers who anticipated the increased need for security and took the time to prepare will be in the best competitive position."

There is some additional good news within the survey results. Most smartphone users are willing to pay more for the security services we believe the mobile service providers should overtly look to provide. Although the majority of smartphone users are concerned with high fees:

  • Interestingly, although most users don't think about security, 43 percent of respondents say they are fully aware that their smartphones contain applications that store or have access to sensitive financial information.
  • 53 percent of global respondents expressed a willingness to pay their network provider additional fees to help improve security.
  • Regionally, 59 percent of U.S. and 65 percent of German respondents would be willing to pay extra for security services.
  •  63 percent of U.K. respondents on the other hand were not in favor of paying any type of additional fees for security.

The survey also found - certainly no surprise here - that in the event of a smartphone security breach, access to personal information, such as credit card numbers and passwords, worried 60 percent of users. More than 42 percent worried about losing their stored contacts, and almost half, 45 percent, were worried about access to their private media such as photos, videos, text messages.

The bottom line, clearly, is that security and the notion of getting hacked plays two ways. Either it will lead to very nasty results for a mobile service provider or, if mobile services providers take a large proactive stance to offer security services it will in all likelihood lead to additional revenue as well as user protections.

Edited by Brooke Neuman

TechZone360 Senior Editor

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