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Pros and Cons of Banking on Your Phone

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Written by: John Waldron | markITwrite

Today, we can accomplish pretty much all of our day-to-day tasks via our smartphones. From ordering a pizza to mapping our directions to starting the dishwasher, we use our phones to feed us, to find us, and even to clean us.

These are of course the rather menial tasks, for which apps can offer solutions that have been designed with increased convenience in mind. They are by no means essential, or even particularly consequential should one day we find ourselves without them.

But, when it comes to ordering our finances, our mobile phones are becoming ever more important. In these times, we find ourselves in the rising realms of financial technology (FinTech), whereby there is slowly being invented an alternative digital solution to each and every financial activity that we might have had to once do manually.

From electronic invoicing systems to P2P alternative lending platforms, and from Apple Pay to Bitcoin – FinTech is a rather large umbrella term that encompasses it all. There is a lot of media attention on the sector at the moment, largely describing how the various FinTech and alternative finance platforms are beginning to amount a rather serious disruptive challenge to the banking system as we know it.

Now, whilst that is most evidently true to a certain extent, it’s safe to say that the big banks aren’t going anywhere just yet (it will take another five years, according to a report by KPMG, for the AltFi industry to claw just 10% of loans away from banks), so there’s no need to rush out now and close your bank account immediately.

On the contrary, as the FinTech revolution continues to make waves, the banks are responding with their own digital and technological solutions in order to compete, and if you’ve got a smartphone, then the chances are that you do as well.

It’s All About Convenience

A recent report from the US Federal Reserve has found, as stated on cbsnews.com, that:

“87% of U.S. adults have a mobile phone, and 71% of those mobile phones are Internet-enabled smartphones, a rise of 10% from a year earlier.”

“The survey also found that 39% of adults with both mobile phones and bank accounts reported using mobile banking – a 33% increase in usage from 2013.”

People frequently turn to their phones to handle their banking needs, such as managing accounts, transferring money and even paying for items at the checkout counter. Banking on our phones has become so mainstream that the thought of ever having to go back to the offline days is overwhelming. However, while banking on your phone is convenient, experts also warn about security risks.

The Pros Of Mobile Banking

Many people agree that banking on your phone is an advantageous tool that fits handsomely into our ever-evolving world. It is simply online banking taken to the next level. Banks and financial institutions are even releasing applications for a variety of smartphone operating systems to make banking on a phone easy for their customers. While convenience is the undeniable primary benefit of mobile banking, other pros include:

  • Ease of paying bills
  • Ability to access accounts
  • Simple to set up and use

By allowing the customer to handle basic money management at any time and place, mobile banking is proving to be extremely appealing to those who find the time to do traditional banking a challenge.

The Cons Of Mobile Banking

Admittedly there isn’t a lot of downside to mobile banking but there are a few things that many customers would change if they could. For example, one of the major drawbacks associated with managing money on your phone is security. With the increase of electronic identity theft, proper safety and security measures must be taken when handling finances on your phone to avoid vulnerability should your device be stolen, hacked, or encounter any other problems.

Customers of mobile banking would be happier, in general, if they could see improvements in the following three areas:

  • Increased security
  • Reduced transaction problems
  • Available balance access issues

Of these three, it is only the first point that can actually be described as a risk – the other two are largely concerned with UI (user interface) and UX (user experience) issues, which the various apps available are constantly trying to iron out.

But, when it comes to security, the issue is a very serious one indeed. If mobile bank customers aren’t careful, scammers, hackers and thieves could potentially compromise their personal information and hard-earned money.

Tips for Safe and Secure Banking on Your Phone

Regardless of the dangers associated with banking by phone, mobile banking is here to stay. Mobile banking will undoubtedly make your life easier, and, if you undertake some vigilant precautions to always ensure that your transactions are secure, then making the move to mobile may be the best way to manage your finances. Some important tips to remember include:

  1. Set your phone to require a password to unlock the device.
  2. Don’t let your banking app remember your password.
  3. Don’t save account numbers, PINs or passwords on your phone.
  4. Download your bank’s app – mobile browsers are more susceptible to security risks.
  5. Report a lost or stolen phone immediately to your bank or financial institution.

Banking on your phone, even with its inherent security risks, may be a safer method of protecting your financial information than the old-fashioned way of handling your money on paper. If truth be told, scammers are more likely to access your account data by stealing bank statements out of your mailbox than by digitally monitoring your phone. But, that being said, you can never be too careful when it comes to finances and digital security –however, on the whole, mobile banking is considered to be a largely safe bet.

Do you use mobile banking? What are your experiences? 

 

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