My iPhone Security: Should I Be Worried?
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iPhones are fantastic devices and useful for all sorts of things, some of which involve sensitive information (such as passwords to your banking, email, or other accounts). Unfortunately, there are always bad guys who would like to have this information to use for their own purposes, which usually involve stealing your money.
Since the whole point of an iPhone is being out and about, this means there are more chances for your security to be compromised. Should you stop using your iPhone because of its security risks? Of course not, but you should take some relatively simple precautions to protect your important information.
Before getting into the details, understand that if you use an iPhone to work with sensitive information, there will always be some level of risk that this information will be compromised. However, also consider some perspective gained from the "analog" world. For example, it's likely you routinely take bigger risks using credit cards.
We seldom think anything of handing a credit card to a server in a restaurant; the server typically takes the card away and it's out of our control for several minutes, more than enough time for the server to copy all the information needed to make fraudulent charges on the card (especially if your home address is accessible since billing address information is usually required to make an online purchase with a credit card). Similarly, we use credit cards at gas pumps and other locations where their information is available for people to steal. With this perspective in mind, realize you won't ever have perfect security with an iPhone, just as you don't have perfect security elsewhere in life.
When deciding your approach to security, realize that the more sophisticated techniques you employ to protect yourself, the more complexity and hassle you'll have to deal with.
The goal is to find a good balance between how much work you have to do to protect your information and the level of security you can achieve. Amazingly enough, it turns out that a few simple actions provide a reasonable level of protection for your information.
Physical Security
The most effective way to protect your iPhone's information is to simply keep the iPhone under your control. Don't leave your iPhone where other people can take it from you or use it without you being aware of it. When you aren't actively using your phone, it's a good idea to keep it in a pocket, handbag, or case that's attached to you. Don't leave your iPhone lying around where someone can pick it up, even if you are leaving it for "just a second." Think of your iPhone as a large wad of cash and keep it as close to you as you would that cash; because of the information stored on it, the iPhone is worth a lot more than just the cash required to replace it!
At the risk of becoming a bit paranoid, you should be aware of "watchers" when you use your iPhone in a public place, especially where people are packed tightly together (such as on a crowded bus or subway). Some screens on the phone are pretty easy to view from a distance, and things like passwords can be viewed as you enter them.