- What is Mobile Banking?
- TOP Mobile Banking Advantages
- Improved customer experience
- Time efficiency
- Workload capacity
- Monitoring transactions
- Added services
- Enhanced security
- Catch the fraud
- Managing funds
- Mobile Banking Disadvantages
- Tech issues
- Extra charges for internet services
- Consider Inoxoft as Your Trusted Partner
- Final Thoughts
Mobile banking has become increasingly popular in recent years. It has grown to be an essential tool in the lives of more and more people all over the world. No wonder: it is a convenient and straightforward way to manage your funds. And even though mobile banking has numerous advantages, it also has some minuses. How has electronic banking changed banking services? What are mobile banking’s advantages and disadvantages?
Electronic banking drastically changed the banking service experience for every smartphone owner. Technological progress allowed mobile banking to develop an absolutely revolutionary approach to the whole money managing experience.
What is Mobile Banking?
It is an application on your smartphone that serves as your pocket bank and operates without needing to stay in queues. Your bank suggests you sign up for an app where you can deposit checks, keep track of your bank balance, and get notified about the latest news, updates, and offers. You can also find ATMs in your area and other mobile banking benefits provided to its customer disposal.
Mobile banking app features include 24-hour access to account balances, account history, transactions, bill and loan payments as well as travel services. And all of that allows you to transfer funds from your bank account to another in a heartbeat.
Let’s shift closer to the advantages of mobile banking apps that can save you time, money, and effort.
In recent years, more than 79% of smartphone owners have used their gadgets for online shopping. Statistics say that over 75% or roughly 246 million Americans used their smartphones to check their bank balance in 2019 alone, 97% of millennials use mobile banking daily. In general, there are more than 7 billion mobile users worldwide. One of the financial services technology trends is the move to digital, especially in mobile banking. Our society becomes completely cashless which is evident after a year of a pandemic.
Read more: how to start a neobank from scratch
According to the American Bankers Association survey, 39% of bank clients are managing their banking accounts through mobile apps — making it the most convenient approach to interact with financial organizations.
What are the advantages and disadvantages of mobile banking? Let’s dive in to find out.
Get to know what can you get out of big data analytics for financial services!
TOP Mobile Banking Advantages
Let’s talk about the mobile banking advantages for both, financial institutions and clients.
Improved customer experience
When it comes to the banking business, a relationship with a customer is key. By maintaining a good, respectful, and healthy relationship with the client, you have higher chances to both keep them and attract new ones. Being available 24/7, mobile banking is great for those who are not always able to visit the actual facility during its working hours.
You can use a banking app to pay for your bills, rent, or utility fee online and never worry about the possibility of your physical check getting lost in the mail. Most banks have an option to set up payees, and once you fill-up the information, such as amount, credit card info, and receiver you are ready to go. After that, you just choose that one paying option anytime you have to pay.
As we’ve discussed already some of the pros and cons of mobile banking, here are essential features of the mobile banking apps:
- 24/7 access to your account
- Possibility of money transfers
- High-level security
- Fraud alerts
- Customer support line
- Loan payments
- Bill payment alerts
- Range of other services (e.g. pay for public transport)
In the modern world, you would prefer your daily tasks to be simplified as much as possible, and the digital banking system fulfills this wish. Not only the system saves your time by eliminating the need to go out and pay a visit to a physical bank, but it also can help you with optimizing your money and managing expenses in all sorts of new ways. Statistics show that annually mobile banking saves you:
- 6 hours of waiting in line at the bank on average
- 20 hours of receiving help from a teller on average
- 396$ cost of paying one overdraft monthly
- 38$ of credit card late fees
Mobile banking eliminates the human factor during different work operations. Plus it boosts productivity and quality and causes a lot of issues clients can fix by themselves through an app.
Among other benefits of mobile banking services is the ability to monitor and manage all your financial transactions. You can monitor your bank accounts and prevent fraudulent transactions if such occur, by logging in to your mobile banking app.
Another advantage of mobile banking apps is the larger number of advanced services compared to traditional financial institutions. The app lets you not only control your funds remotely but also deposit a check, activate a new credit or debit card, block it per need and send someone money whenever you want.
Money matters have always been sensitive. Security is an essential aspect of bank business and applies to both guarding your assets and your interactions on the apps. Since it’s not your social media account where the username and password would be enough to get access, it takes more than that to sign in to a banking app.
Most banking apps require multi-factor authentication, where you have to use your phone number, mail, id, or even a fingerprint and a face scan. Furthermore, this kind of authentication is also required to complete any transactions, no matter how much you plan to send. These measures are taken for maximum security since there is always a possibility of a hazard or intended harm.
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Catch the fraud
Despite several benefits and drawbacks of mobile banking, another convenience of using it is that you can catch account fraud a lot quicker if you’re linked up to your app. You can log in as much as you need or turn on notifications to get transaction alerts. That way you know if something unusual is happening. If you check your account activity regularly you might catch unfamiliar transactions and so forth.
The mobile banking app serves as a remote control for your funds. The app allows you to perform tasks on your bank balance and send someone the money wherever you are and whenever you want. Online banking also offers a feature to instantly deactivate your credit card if it ever goes missing. In case of finding the lost card, you can easily turn it back on with just one tap.
Moreover, as a client, you can see and manage where you have your credit cards stored. Also, you can manage your monthly subscriptions and cancel the ones you do not use anymore. Another benefit of mobile banking suggests that you have 24/7 access to your accounts, which allows you to keep an eye out on your funds, as you can monitor your spending whenever you wish.
Mobile Banking Disadvantages
There are a lot of merits and demerits of mobile banking, so let’s discover things that are better to avoid.
How secure are banking apps? Despite the bank’s best efforts to keep its customers out of harm’s way, the system is not 100% reliable yet. Although most ordinary users never face any cyber threats, some unlucky individuals still do. The users of mobile banking systems are vulnerable to fake notifications and scams, as well as robbers and pickpockets. If you lose your phone, the criminal who stole or finds it may try to log into your bank account. And as we know, it will cause a lot of trouble. The statistics show that:
- Mobile app fraudulent transactions have increased by over 600% since 2015
- 89% of digital fraud losses are the direct result of takeovers of the accounts
- About one in every 20 fraud attacks are associated with a mobile banking app
- On average, there are 82 new rogue applications submitted daily
- Mobile fraud losses reached more than $40 million across 14,392 breaches in 2019 alone
Even though banks are trying their best to develop the safest, most secure system, they usually fail to do so. The researchers state that 97% of banking apps presented insufficient code protection. 90% of those experienced information leakages to other apps on devices, and 83% of solutions using APIs just stored data mindlessly, letting hackers steal it. And in 80% of products, the encryption methods were not efficient enough. Since the COVID-19 crisis took over the world, so did the criminals. In the wake of the global pandemic, hackers tend to perform illegal activities much more often than before.
As of May 28, 2020, the Internet Crime Complaint Center received nearly the same amount of complaints in 2020 (about 320,000) as they had for the entirety of 2019 (about 400,000)
Calvin A. Shivers, assistant director of the FBI’s Criminal Investigative Division
A survey that was conducted by CrowdStrike stated that 59% of participants did not believe that their business would experience any serious cybercrime during the COVID-19 crisis, yet CrowdStrike has confirmed 100 times more COVID-19 related malicious acts from February to April 2020.
As of April of 2020, 450 active World Health Organization email accounts and passwords were leaked online alongside thousands belonging to other individuals and organizations researching the recent coronavirus response. Paul Chichester, the Director of Operations at the National Cyber Security Center in the UK stated:
We know that cybercriminals are opportunistic and will look to exploit people’s fears, and this has undoubtedly been the case with the Coronavirus outbreak
Limitations of mobile banking may happen because of bugs that occur during the development and sometimes after the application launch. It is essential to find and fix all the issues in the program with the help of a testing service to satisfy your client.
Everything you need to know about mobile application architecture.
Extra charges for internet services
One of the mobile banking disadvantages is the presence of extra charges for some of the bank services (and we’re not talking about commissions) Certain features like insurance may charge extra fees.
Consider Inoxoft as Your Trusted Partner
Inoxoft is an experienced mobile app development company with a narrow focus on fintech development services and even more specifically, on banking software development services. Our solutions have always been helpful tools in our client’s businesses.
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One of the numerous benefits of mobile banking is saving up to 26 hours and 434$ per year. Furthermore, several major banks like Wells Fargo recently provided their users with money guidance on their mobile apps, allowing them to save even more time and let the machine do all the work. No counting, no paper mess – everything you need right at your fingertips, just one click away from you.
All in all, using mobile banking is a huge improvement in the day-to-day activities of anyone who deals with money—starting with casual grocery shopping and all the way to stock traders. Yes, mobile banking has its own flaws and security loopholes. Nevertheless, the concept is promising and has been successfully used worldwide by thousands of people.
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What are the advantages and disadvantages of mobile banking
The advantages of mobile banking include 24/7 access to funds, convenient way of paying bills, taxes, and loans.
The top disadvantage of mobile banking is potential security risks, tech issues, and extra charges for services.
What are the benefits of mobile banking to banks?
Mobile banking gives institutions advantages including the availability to store more data with help of automation, loyal customers who enjoy convenience, and a variety of services. Read our article to learn more.
What are the benefits of mobile banking to customers?
The benefits of mobile banking for users include time efficiency, the possibility to manage funds, transfer money, and detect frauds quickly. Also with the help of digital banking users have 24/7 access to their accounts (including the possibility to check balance) and reminders about bills payments, loans, etc.