As mobile banking became 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. And no wonder: it is a convenient and simple 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? And what are mobile banking’s advantages and disadvantages?
Electronic banking drastically changed the banking service experience for everybody who owns a smartphone. Technological progress allowed mobile banking to develop an absolutely revolutionary approach to the whole money managing experience.
What is mobile banking?
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It is an application on your smartphone which serves as your own pocket bank. This app operates without a need to go out and stay in the queues waiting to be served. Your bank suggests you sign up for an app where you can deposit checks, keep track of your bank balance, get notified about the latest news, updates, and offers, find ATMs in your area, and other mobile banking benefits offered 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. The main and most significant of which 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 your 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.
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.
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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 with the help of word of mouth. 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 bigger amount of advanced services they offer clients 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. This applies to both guarding your assets and your interactions on the apps. Since the banking app is not your basic social media account where the username and a password would be enough to get access, it takes more than that to sign in, for banking apps are highly secured. Most banking apps require using multi-factor authentication, where you have to use your phone number, mail, id, or even a fingerprint and a face scan. To take matters further, this kind of authentication is also required to complete any transactions, no matter how much you are planning 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 transactionі
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, whenever you want to. 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
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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? Sadly, 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 find it may try to log into your bank account, causing 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 in developing the safest, most secure system, they usually fail to do so. The researchers state, that 97% of banking apps presented insufficient protection of the code, 90% of those experienced the leakage of information to other apps on devices, 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. And 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 occur because of bugs that occur during the development and sometimes after the launch of the mobile application. It is important to find and fix all the issues in the program with help of a testing service, to keep your client satisfied.
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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.
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As we’ve discovered what are the advantages of mobile banking, to sum it up, with this already essential service, you can save up to 26 hours and 434$ per year. This is an example of one of the numerous benefits of mobile banking. Furthermore, recently several major banks like Wells Fargo provide their users with money guidance on their mobile apps, allowing you to save even more time and let the machine do all the work for you. 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 the stock traders. Despite having its own flaws and security loopholes, the concept is promising and already successfully used all over the world by thousands of people.