Mobile Banking:
Benefits and Concerns
If you’re like most Americans, you probably use your cell phone for all sorts of things, including banking! According to a recent Forbes consumer survey, just over three in four Americans have used their primary bank’s mobile app within the last year for tasks like depositing checks or monitoring account balances.
This may seem completely normal to us now, but even 10 years ago, most banks couldn’t deposit checks online. Remember how nervous you were the first time you did that? This change over time definitely shows how much our trust we have in smartphones, mobile banking and internet security. But should we still be worried? Is it worth the potential risk for how easy it us to just use our cell phones?
Why is mobile banking so popular? First, it saves time. Second, it saves money! It’s no longer necessary to waste time and gas driving to the bank – you just take a picture and have a check deposited in seconds or check your balance on the go. Previously, you may have held onto a check for days or weeks before depositing and the bank would put a hold on the check when you brought it into the branch to deposit. Now you can now have the money in your account in just a day or so, if not immediately, and know what you can afford to spend!
Mobile banking also saves money for banks. According to Javelin Strategy & Research, the average cost of a mobile deposit is 10 cents. The same transaction costs the bank $4.25 when processed in a branch. This means that the bank saves $50 per mobile banking customer each year, or $1.5 billion for the entire banking industry! With this much money on the line, banks have financial incentive to make their banking and credit card mobile apps as easy to use and secure as possible.
As we’ve gotten more comfortable with this style of banking over time, mobile banking has also made it so smaller banks and credit unions can offer the same services as large banks. It has even created the market for banks to operate only online! Without a physical bank location, often banks are able to pass those savings onto customers, creating new, cheaper, and better programs.
So what’s the downside? Why do some people think twice before using mobile banking? For roughly 8 out of 10 mobile banking customers, the answer is concerns about digital security, according to Cornerstone Advisors. While there are risks, mobile banking also makes monitoring accounts easier – so it’s easier to tell if or when someone has stolen your account and made unauthorized purchases, right from your banking or credit card mobile app.
Banks have identified fraud protection as an area where they can improve safety by having a mobile app, so it is in their best interest to build great mobile apps and websites with identity safety tools.
With that in mind, what are some ways you can protect yourself from fraud?
- Make sure your bank uses two-factor or multi-factor authentication
- Use a strong password
Make sure that you’re using different passwords for different sites. Don’t use anything that people might guess about you. It always helps to add numbers and symbols too!
- Use a secure wireless network
If you’re checking your bank’s mobile app in a coffee shop, don’t use their wifi if you can avoid it. It’s more secure to use your phone’s data plan!
- Set up fraud alerts via email, text, or push notifications
While it can be a little bit annoying if your own transaction gets rejected because your bank thinks it’s fraud, setting up these types of fraud alerts can save you lots of headaches – and money!
All in all, it’s clear that our phones, our banking and credit card mobile apps are getting more and more powerful.
Mobile banking makes it easier for us to monitor our credit cards and bank balances, manage our account balances, and pay our credit card bills.
So, if you’re getting a credit card or debit card, make sure that they have a powerful, secure mobile app – it’ll make your life easier and more secure!
