It’s something many of us are already doing. We login to our mobile banking app to deposit a check, pay back a friend and check our account balance.
The allure, of course, is its convenient real estate: Our smartphones are usually near us at all times and a mobile banking app can help us quickly take care of a wide range of troublesome to-dos whenever we wish.
“The mobile app features these days are so comprehensive,” says Paul McAdam, senior director of banking services at J.D. Power. “We can deposit checks. We can transfer money within our bank. Not in all cases, but in many cases, we can transfer money to another financial institution. We can pay bills. We can do person-to-person transfers. From the standpoint of monitoring and moving money, it’s so easy.”
Key benefits of mobile banking
Because of these conveniences, mobile banking apps are super trendy and have been for a handful of years.
Mobile banking began catching on in 2007 when the iPhone first came out. These days, usage has passed a tipping point. More than 50 percent of consumers have used mobile banking in the past three months, according to the most recent J.D. Power study.
Over the years, the mobile banking experience has come a long way thanks to advancements in data sharing and other behind-the-scenes technologies improving.
While mobile banking apps started out as mini versions of your online bank account experience (think: letting you check your account balance on a ledger and seeing if a literal check cashed), they are also now acting more like a financial companion of sorts that send relevant messages.
“Ten years ago, [mobile banking] was almost a novelty and it was about the size of the device,” says Anthony Ianniciello, vice president of consumer and mobile banking at Q2. “Today, it’s really about the context: When are you going to pull it out of your pocket? When are you going to use it and what are the things that are the most convenient for you to do in that form factor at that time?”
Mobile banking apps can caution you when you spend more than you have in your account, automatically move money into savings on your payday and let you set controls on your cards to restrict spending.
Still, the hottest mobile banking features today are pretty basic. In the last year, getting alerts, tapping a button in a bank app to call a customer service representative, making peer-to-peer payments and setting up travel notifications were the fastest-growing features in mobile banking year-over-year, per J.D. Power’s data.
1. Good security
Banks are in the business of guarding your assets — including your interactions on their mobile apps.
Of course, nothing is foolproof. But there are steps you can take to step up security precautions if you’re worried about mobile banking security.
While you may still use a username and password to login to a mobile banking app, your bank may let you enroll in added safety measures. You could, for example, enroll in multi-factor authentication where you need two (or more) kinds of verification to prove that it’s really you. For example, a bank could send a code to your phone for money transfers above a certain amount. In order for the payment to go through, you would need to enter the code in addition to logging in through the app to help verify you are who you say you are.
These days, mobile devices — and some bank apps — will let you login by scanning your face or fingerprint as yet another way to protect your digital bank account.
That also means if your phone goes missing, you will have an added lock to keep fraudsters out. You can also disable your mobile phone remotely.
The ability to access your financial records anytime, anywhere makes mobile banking appealing. You can deposit checks, send someone else money and monitor transaction history while standing in a grocery line. Those actions give you a safety advantage, too: In monitoring your account more often, you’ll have a greater chance to discover fraud more quickly or spot times when you may need to slow down on spending.
“There’s less of a likelihood of making a mistake, [like] an overdraft or paying a bill late when we have this information so accessible,” J.D. Power’s McAdam says.
In recent months, banks have been going one step further by offering money predictions via their mobile apps’ messaging. For example, U.S. Bank recently overhauled its mobile app to include messaging customers when its algorithms see an opportunity to save money, or alternatively, forecasts when they are at risk of overdrafting an account. These kinds of features are designed to be useful to the millions of Americans living paycheck to paycheck.
It’s also easy to send someone money while logged into your mobile banking app. Banks across the country partner with Zelle so that you can send someone money in minutes through your mobile banking app. You will only need to know your recipient’s email address or phone number to send them money. If your bank doesn’t offer Zelle, it will usually let you send a transfer to someone else’s bank account if you know their routing and account number.
Think of a mobile banking app as a remote control for your money. The app lets you deposit a check and send someone money whenever you wish.
The controls are getting more advanced, too.
A growing number of banks, like Wells Fargo, Ally Bank and Bank of America, let you use your mobile banking app to turn your debit or credit card off if it goes missing or is stolen. It’s a nice feature to help you feel instantly secure in a moment of panic — calling a 1-800 number is not required if you want to turn your card back on, either.
Some banks have already extended the use case of the card control feature. At Wells Fargo, customers are able to see their recurring payments connected to their payment card in addition to turning their cards on and off under one hub. It’s called Control Tower and it ought to help you when you’re in a life transition, like when you’re moving to a new city and want to make sure you aren’t paying for services you no longer use.
“As a customer, you can see where you have cards stored, where you have subscriptions, where you potentially have monthly payments that you aren’t using [that] you can get rid of,” says Stephen Greer, a senior analyst focused on retail banking at Celent.
You may also want to enroll in something bank apps have long had: mobile alerts for low balances and when your transactions post.
Disadvantages of mobile banking
Not all mobile banking apps work well. You could become frustrated with a digital banking experience. Even the best ones will encounter outages every now and then.
As banks layer in ever-more features, navigating the apps can feel daunting, too. In fact, multiple recent J.D. Power studies have shown a decline in mobile banking satisfaction in the U.S. “As banks are adding more features, some consumers are being stumped,” McAdam says. “They maybe don’t know how to use it or can’t figure it out.”
If you’re among them, check with your bank to see if it does in-person demos. Some banks appoint specialists in their branches to help customers learn how to use digital banking features.
Another downside with mobile banking apps is they lack support for taller orders, like getting a mortgage. “A big disadvantage of mobile is you are not getting that kind of detail that you would get from an in-person interaction,” Greer says. “And people want that assuredness when they are doing things like shopping for a home loan or auto loan or something that’s more intense than making payments or checking transactions.”
Highly rated mobile bank apps
- Chase: The big bank lets you do the basics, like send money to someone else and monitor your account. It also shows you highlights of your spending and saving patterns on a non-ledger interface.
- Chime: The challenger bank that partners with The Bancorp Bank to hold your deposits gives you daily balance alerts and allows you to block your card in-app. More impressively, it lets you set up rules to automatically save money and potentially get your payday up to two days early.
- Bank of America: Among the standouts of the big bank’s app is Erica, a virtual assistant that can answer a wide range of financial questions. You can also use the app to book an appointment with an in-person banker.
- Ally Bank: The online-only bank offers the staples (find nearby ATMs, transfer money) and provides extra touches. You can use Ally Assist, a virtual assistant who can answer questions you have. You can also set up controls for your cards.
- Current: The challenger bank’s app provides the biggies, like the ability to deposit checks. It also lets direct deposit customers get early paydays and provides insights into their spending patterns.
Mobile banking apps help you take care of tasks quickly and should only get better in helping you demystify ever-more of your financial health concerns as banks continue to pour all kinds of money into their digital experiences.
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