Mobile banking was already gaining popularity when the coronavirus pandemic struck, but the disruptions and restrictions caused by COVID-19 have moved banking by app from novelty to necessity.

The allure, of course, is the convenience mobile banking offers: Consumers tote their smartphones virtually everywhere, so a mobile banking app can help them quickly take care of a range of financial needs whenever they wish. It’s essentially a bank in your pocket or purse.

Mobile banking’s significance is only more profound at a time when branch hours have been reduced and many bank call centers are no longer open 24/7.

Forty-four percent of bank customers used mobile banking apps to manage their bank accounts — making it the most-used method to interact with financial institutions, up from 39 percent a year ago, according to an October survey published by the American Bankers Association.

“Digital banking was on the rise long before COVID-19, but the growth in mobile app use accelerated as the pandemic made in-person banking more challenging,” says Rob Morgan, senior vice president of innovation strategy at the American Bankers Association. “Today’s banking apps are extremely sophisticated, and this survey shows that many consumers who try them quickly make mobile their banking method of choice.”

Here’s why you should use mobile banking in 2023

Mobile banking apps can warn 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. Banking apps can also make it easy to send money to friends and to reach a customer service representative with the tap of a button.

1. Accessing the bank 24/7

Unlike a bank branch, mobile banking conveniently gives you access to your account anytime you like — with some exceptions, such as planned maintenance updates and unexpected outages.

This ease of accessibility saves you time. Mobile check deposit, for example, a feature most banking apps offer, allows you to deposit a check on the go or from the comfort of your couch.

Mobile banking can also help alleviate pandemic-related health worries and other concerns consumers may have regarding banking in person.

“People don’t want to have to go into bank branches anymore, especially during these COVID times, says Billie Simmons, co-founder and chief of staff of Daylight, a digital-banking startup for LGBTQ communities. “But for people whose identity might still not be well received  especially in smaller towns or for trans or [nonbinary] people, the idea of being able to do everything via your phone is super attractive because it allows you a certain layer of safety and convenience that branch banking just can’t provide.”

2. Optimizing your money

The best mobile banking apps have evolved to help you manage your money with less effort. For example, the Ally Bank app offers checking account customers a feature to help organize their money digitally and optimize how much money they can save. The U.S. Bank app alerts customers when its algorithms spot money-saving opportunities or situations when an account is at risk of being overdrawn. Varo, a challenger bank with a federal bank charter, also offers automatic savings tools as well as ApexEdge, a  hird-party service that helps customers negotiate lower payments on bills.

Spending alerts are another way mobile banking apps can help you optimize your money.

“You are seeing a lot of people say, ‘Hey, I want to know every time there is a transaction over $150 or over $250 or whatever that threshold the consumer happens to care about is,” says Zach Bruhnke, co-founder at HMBradley, a challenger bank. “A lot of people want to go and understand things like ‘What are my daily limits?’ Things you’d probably ask your banker or call a branch for, now you are [the] one to do it. The push is for more and more information to be available at customers’ fingertips prints.”

3. Paying IOUs

When you are logged into your mobile banking app, it’s easy to pay back someone you know.

Banks across the country partner with Zelle so that you can send someone money in minutes through the bank’s mobile app rather than paying people  with cash or a check.

You only need to know recipients’ email addresses or phone numbers to send them money. If your bank doesn’t offer Zelle, it usually lets you transfer funds to someone else’s bank account if you know their routing and account numbers.

4. Strengthening security

Banks are in the business of guarding your assets — including transactions made using their mobile apps. Though nothing is foolproof, there are ways you can step up security precautions if you’re concerned about mobile banking security.

Financial institutions often require a username and password to sign into a mobile app and offer additional safety features to further safeguard your account. Multifactor authentication, for example, requires at least two kinds of verification to prove that it’s really you. The first are the account credentials (your username and password) followed by a text with numeric code sent to your phone that needs to be submitted to gain access to the account.

Further, some mobile devices —  and some bank apps — let you log in by scanning your face or fingerprint as yet another way to protect your digital bank account without trading convenience. “In mobile banking, you can really leverage biometrics for authentication,” ABA’s Morgan says.

The security features also allow you to lock or remotely disable your smartphone, should it go missing, to keep fraudsters out.

Your bank app may also let you share your location to help you spot payment fraud.

“It can be better for security for the consumer because we are getting to the world where we can do things like, ‘We know where your phone is and if your card is a long way from your phone, it might not be you,’” HMBradley’s Bruhnke says. “There are a lot of interesting security controls that can come out of actually having the app installed.”

5. Providing added controls

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.

These controls are getting more advanced. Some bank apps let you activate a new credit or debit card, for example.

“If someone tries to use their card that is not activated, a bank for years would just decline the card. That’s the default,” Bruhnke says. “Now if you have the mobile app, you can get a push notification of, ‘Hey, your card hasn’t been activated. Do you want to activate that?’”

It’s not the only way banks let you control your cards. A growing number of banks, such as Wells Fargo, Ally Bank, Chase and Bank of America let you use their mobile apps 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 toll-free number is not required if you want to turn your card back on, either.

6. Offering clarity about where your financial data is going

Many consumers share bank data to use services like Venmo and Mint. Depending on how many outside apps you use, it can be quite taxing to remember which company has what bank data. So a number of banks are trying to help customers understand where it’s going by changing the way data is shared behind the scenes.

“We are seeing a lot more banks offer that functionality that gives consumers proactive control over where their data is going,” ABA’s Morgan says.  “It’s not just the added security … But it’s also the importance of transparency so you see where your data is going, how it is being used and [controlled], the ability to turn off this thing when you are no longer using the service.”

At Wells Fargo, for example, customers are able to see recurring payments connected to payment cards and can turn their cards on and off under one hub, called Control Tower.

7. Giving you tailored options

If you are looking for a like-minded community, mobile banking provides a variety of options to serve specific pockets of the population.

Daylight, for example, is a digital bank focused on addressing financial issues facing LGBTQ communities, such as lower mortgage approval rates. Daylight has also partnered with Visa to offer a debit card that features account holders’ chosen names rather than their birth names, a feature that may appeal to those who have transitioned their gender.

Rob Curtis, co-founder and CEO of Daylight, says going into a bank as an LGBT person is largely an exercise in futility. “They won’t understand who you are,” Curtis says. “They will ask you the wrong questions and they will give you a service that is designed for people that don’t act like us.”

There are also startups building mobile financial tools for Black communities, young adults, women and other groups.

Disadvantages of mobile banking

Not all mobile banking apps work well, and even the best ones encounter outages every now and then.

As banks layer in more features, navigating the apps can feel daunting, too. It’s not always obvious what features are available or where they’re located within the app. The good news is that banks are working to make their designs more intuitive.

Highly rated mobile bank apps

In 2023, mobile banking apps with standout features let you automate money decisions, block your cards, quickly get answers to your questions and more. Here are some of Bankrate’s favorites.

  • Chase: In addition to allowing you to send money to someone else and monitor your account, the Chase app shows you a simple daily snapshot of your spending and saving patterns. You can also set savings goals and track your progress.
  • Chime: The challenger bank 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. You can also overdraw your account without paying a fee.
  • 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 mobile app to book an appointment with an in-person banker.
  • Ally Bank: The online-only bank offers the staples, such as finding nearby ATMs and transferring funds) and provides extra touches. You can use Ally Assist, a virtual assistant that can help initiate transfers and bill payments, as well as provide information on interest earned and patterns of spending and saving. You can also use the app to set up controls for your cards and create savings buckets to help organize your money.
  • Current: The challenger bank’s app provides the ability to deposit checks, and it also lets customers set up savings pods for their goals.
  • Varo: This online-only bank’s app lets you track your spending with instant alerts, send money to friends and family, locate in-network ATMs and lock your debit card if it’s lost or stolen.

Bottom line

Mobile banking is designed to help you in all kinds of ways — some of which are fundamentally redefining the role of a bank. Thanks to 24/7 access to accounts and the ability to make transactions with the tap of a button, consumers have more control over their money management — making trips to the local bank for many a thing of the past.