Mobile Banking’s Impact on How We Bank & Make Payments
By the year 2017, it is estimated that over one billion people will use mobile banking on a regular basis.
Just about everything these days involves doing things online in some form or the other.
From getting a quote on car insurance (when was the last time you actually went to an insurance outlet?), to conducting online reviews, and, of course, conducting banking transactions.
It is certainly no secret that smartphones, mobile apps, and technology in general have significantly altered how we conduct everyday tasks.
Mobile Banking in the 21st Century
As reported by Pew Research, which conducts surveys on mobile banking usage:
“A new category of consumer has emerged known as the “smartphonatic,” defined as someone who changes shopping, banking and payment behavior after switching to a smart phone. Globally, a quarter of smart phone owners are considered smartphonatics. Among this group, 80% use their phone for mobile banking and 70% use it for mobile payments.”
When you look at those numbers, the findings are intriguing. Seems quite a significant amount of people are using mobile platforms, apps and smartphones to conduct personal financial affairs.
While online banking has been around for years and is now a common occurrence, using mobile technology to access accounts and make payments is only a recent phenomenon, so the figures are quite surprising.
Mobile Banking Security
For a lot of consumers, security and trust are two key concerns when it comes to using mobile banking.
How do you know that using any technological device to access your bank accounts – let alone a mobile phone – is safe and secure?
Banks have been quick to address and latch onto these concerns. On any bank advertisement that promotes mobile banking, you will see high level security as one of the main selling points.
However, just how secure are mobile banking apps and websites? How vulnerable can they be to cyber-attacks, intrusion and misuse?
Recent polls show that many people aren’t entirely convinced over mobile banking, despite most mobile banking apps not storing any personal information on your device.
When you visit most websites they automatically store your login details (at least your username) to save you having to enter it over and over again. If they don’t store it automatically, they’ll have a check box underneath the login section that you can click on, and have your information stored.
Banking apps, on the other hand, require you to go through several layers of security before you can access your account. And, in most cases, they don’t store your login credentials.
They also use what is called SSL (Secure Socket Layer) connections to further boost security (the same system that is used when you purchase an item online and need to enter your credit or debit card details). Also, bank apps won’t work on phones that have been jail broken or compromised in any way.
Actually, the biggest security risk to your online banking being compromised is by users themselves. The bank can only do some much to protect you and it is up to the user to take it that extra step to ensure that their mobile banking is secure.
Mobile Banking Security Tips
Some of these may sound like obvious things to do. However, it is surprising how many people don’t take as much care in their mobile security as they should, and this can lead to fraud and your bank details being stolen.
As stated by Greg McBride, a senior financial analyst for Bankrate.com, “if you don't take precautions — like using only Wi-Fi networks you know are secure and making sure nobody is looking over your shoulder to see your password — then you're just increasing the odds of something going wrong."
Locking your phone when not in use and especially after you have just used your banking app is paramount to your phone’s overall security.
Also, using the variety of anti-virus apps that are available, particularly on Android based devices, will help as well.
These work in the same vein as anti-virus software on your computer and will alert you to any suspicious behaviour that could compromise your banking details.
Ensure that you clear your browser history if you are visiting your bank via your smartphone browser (Chrome for instance).
Also, it is worth clearing the data from your mobile banking app too, just to be on the safe side.
This may seem like overdoing it a bit, but it would considerably decrease the likelihood of fraud.
These are very basic points and actions, but taking a few seconds to do each one after you use your banking app will ensure that you are doing your utmost to keep your accounts safe and secure.
Why Use Mobile Banking?
So far we have discussed the increasing trend in how many people are using mobile banking, and also how you can keep your details and accounts safe.
But why should you use mobile banking in the first place?
For starters, it provides easy and fast management of your accounts on the go.
If your bank account balance is running low, you can be reminded by text or by an app alert.
Many banks allow you to search for the nearest ATM or branch if you are in an unfamiliar place (Bank of America for example), and you can check your balance on the move.
If you are looking to purchase an item and you are unsure of your balance, you could search around for the nearest ATM or you could just spend 30 seconds accessing your account via the app on your phone.
Mobile Banking and Free Services
Banks don’t charge to send you banking activity text alerts.
Indeed, there are also no charges for moving money around via mobile banking.
While your network provider may charge for using data depending on your cell phone plan, the actual cost of using mobile banking services is zero.
That being said, earlier this year, Regions Financial (an Alabama based corporation) started to charge a tiered fee structure for moving funds via digital means (mobile banking).
This is not likely to become popular any time soon, as most clients interviewed said they would consider changing banks if fees were charged. However, it is unlikely that zero fees will still be here further down the line.
Looking to the Future
What does the future hold for mobile banking?
Now that it has emerged as a mainstream way to conduct your financial affairs, how will it evolve over the coming years?
While most banks do not currently charge fees for mobile banking use, as we explained above, some are starting to bring in charges.
This can range from some things as simple as paying a few dollars to download the official banking app, to a fee structure that will charge a certain percentage of the payment, transfer or deposit that is made via mobile banking.
Physical Bank Branches are Not Going Away Anytime Soon
Some people don’t have access to smartphones or tablets (nor do they want to), and there is also the issue of trust with using electronic means to access bank accounts.
While you can apply for a credit card or a mortgage online, you still need to sit down face to face with someone at some point and discuss the details.
This is unlikely to disappear, despite more and more banks providing automated, online and mobile banking services in the coming years.
Is Mobile Banking For You?
If you own a smartphone or tablet, then you most likely have been tempted to access your bank accounts at some point.
It is just so easy to do so.
Why wait until you get home or to the office to use your computer, when you can make a quick payment via your phone?
Why travel all the way to a bank branch or ATM when you can just take a picture of a check and have it immediately deposited into your account?
More people are now seeing the wide ranging benefits that come with mobile banking, and the ways in which it is changing the way we conduct our financial affairs.
It might not be for everyone just yet, but over the coming years it will evolve into a more acceptable and mainstream way of conducting banking transactions and payments.