7 key benefits of mobile banking

Mobile banking has become the norm in many consumers’ daily lives. A report from the American Bankers’ Association found that 81 percent of consumers had managed their bank account from a mobile device at least once in the past month.

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.

Having tools that make it easier to manage your finances is especially valuable at a time when most consumers are struggling to save. To put it in perspective, Bankrate’s 2024 emergency savings report found that 56 percent of Americans wouldn’t be able to pay for a $1,000 emergency expense with their savings. Mobile banking offers expense tracking, automated savings, account access for those who might not have a branch nearby and more to aid in your finances.

Advantages of mobile banking

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 apps can also make it easy for users to schedule and pay bills at their convenience with features like bill pay and upcoming payment alerts. Customers can ensure bills are settled on time, regardless of whether it’s on the go or late at night.

2. Making it easier to save

The best mobile banking apps have evolved to help you manage your money with less effort. For example, the Ally Bank app offers several savings features, including automatic transfers to a savings account and round-ups that move rounded up change into your savings. 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.

Some online-only banks are also offering innovative savings features through their apps. Varo Bank, a popular online bank, offers a Save Your Pay feature that automatically stashes away a pre-set percentage of your paycheck each time it deposits.

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,” Brunhke adds.

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. Multi-factor 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.

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.

5. Offering clarity about where your financial data is going

Many consumers share bank data to use services like Venmo. 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,” says Rob Morgan, senior vice president of emerging technologies at the American Bankers Association. “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,” Morgan adds.

At Wells Fargo, for example, customers are able to see recurring payments connected to payment cards.

6. Tracking expenses

When it comes to managing and sticking to a budget, tracking all of your expenses is the part that requires the most labor, and it may lead you to give up on budgeting altogether. Mobile banking apps can do much of that labor for you, by keeping track of your expenses tied to a particular account and organizing them into spending categories. You can see a breakdown of total expenses for things like utilities, dining, transportation and more.

By reviewing your spending patterns, you should gain a clearer understanding of where your money is going and can identify areas where you may need to make adjustments.

Some apps even come with built-in budget creation. Regions Bank, for example, offers a suite of budgeting tools through a feature in its app called My GreenInsights. Users have the ability to set up a budget in the app, sync multiple accounts to it and monitor their spending progress.

Other banking apps allow you to set financial goals, such as saving for a vacation or paying down a debt. Ally Bank and Capital One are two banks that come with features that let users establish and track progress toward different savings goals.

7. Giving you tailored options

Mobile banking can offer services to those who might historically have been overlooked or who are untrusting of traditional banks.

Bliss, for example, is a mobile banking platform designed for the transgender community. It allows users to put their chosen name on their debit cards, regardless of whether it’s been legally updated, and contains a database of financial goals related to transitioning.

Meanwhile, those who are unbanked or underbanked might find that mobile-only banking providers can help them access important financial services. Chime is a fintech that offers a fee-free checking account and no balance minimums, which can be managed entirely through a mobile device. The account could serve as an alternative banking option to those in geographically remote areas or who have a lack of trust in traditional financial institutions.

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

Disadvantages of mobile banking

Technical interruptions

Mobile banking relies heavily on the user’s mobile device and internet connectivity. If you don’t have your device or the network is slow, it can hinder your ability to perform mobile banking activities. Plus, not all mobile banking apps work well, and even the best ones encounter outages every now and then.

Difficulty using the app

As banks layer in more features, navigating the apps can feel daunting. 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.

Lack of personal interaction

Mobile banking eliminates face-to-face interactions with bank tellers. While this might not be an issue for many customers, it can be a disadvantage for those who prefer assistance or have complex financial inquiries that require more in-depth guidance. However, some mobile banking apps may allow you to contact a banker over live chat or the phone from the app.

Highly rated mobile bank apps

In 2024, 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.

• 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.
• 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.
• Capital One: The Capital One app is easy to navigate, helps you save and includes Eno, a virtual assistant. Users can also add cash in store by getting a unique barcode through the app. They simply enter the amount of cash to deposit in the app, go to a nearby CVS and show the cashier the barcode to scan as confirmation.
• 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: This 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.
• Huntington: Rated the top regional bank for mobile banking in 2023 by J.D. Power, Huntington’s app is great for those who need to quickly check on their accounts. Users can view their account balance with one tap, without needing to log in. The app also offers bill pay, mobile check deposit, the ability to order checks and account alerts.
• 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.

Is mobile banking safe?

A common concern among users is the safety of their financial information. Fortunately, banks have robust security measures in place to protect user data and money.

One of these measures is encryption technology. Encryption means that your sensitive information, such as login credentials and transaction details, remains confidential.

Mobile banking apps also incorporate multi-factor authentication (requiring users to provide multiple forms of identification to access accounts) or biometric authentication (requiring fingerprints or facial recognition to log in). Doing so adds an extra layer of protection against unauthorized access.

Still, there are some best practices to ensure you’re banking safely over a mobile device:

• Enable biometric authentication whenever possible.
• Regularly update your app. Developers often release updates that include security enhancements and bug fixes.
• Frequently check on your transaction history and account statements to quickly identify any unauthorized or suspicious activity.
• Avoid conducting mobile banking transactions on public Wi-Fi networks.
• Be cautious of phishing emails, messages or calls attempting to obtain your login information. Banks typically do not request sensitive information through these channels by reaching out to you first.

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.

— Mary Wisniewski wrote the original version of this story.