We’ve come a long way in just a few years. Not long ago banking consisted of having a local branch that you used and the idea of mobile banking was to use an ATM or your debit card. Then, we saw a flood of what were considered online banks hit the market in the past few years. Banks such as FNBO Direct and ING hit the web and in a sense created virtual banks. Instead of using a branch you managed your money entirely on the web and money magically changed hands electronically. In addition, even the typical brick and mortar banks have now added a wealth of online banking tools that allow you to do almost all of your banking from the comfort of your computer 24 hours a day.
Now banks are taking things one step further with mobile banking. Instead of relying on your computer, many banks now have the capabilities to allow you to transact bank business right from your cell phone. In its earliest form this was little more than receiving text alerts regarding account status, but today you can actually send text messages to your bank and instruct it to provide a balance, transfer funds, or even pay a bill. Forget to pay the cable bill before heading out on a camping vacation? Pay it on the road with your phone!
Beyond banking by text, the popularity of powerful web-based phones has also introduced full mobile versions of a bank’s online banking site. With the ability to surf the web from your phone you can essentially get everything in the palm of your hand that used to take a computer. Some banks have even gone as far as creating custom iPhone or Android apps specifically for their banking platform. This makes it incredibly easy to stay on top of your money at any time.
Mobile Banking Risks
Although this can be a useful feature, do you trust that your information is secure? This is one area that is still somewhat up in the air. Granted, banks typically use secure and/or encrypted transmission methods when dealing with information over the web, but given you’re using a cell phone that’s broadcasting packets of information through the air can you be certain that the information isn’t being picked up elsewhere and somehow exposed by someone else? While experts suggest this is unlikely, hackers are always finding ways.
But what’s even more of an issue are phones that utilize WiFi. You may not think twice about it, but if you frequent a coffee shop or something that has an open and free wireless connection and your phone decides to use it, that banking app running in the background could be transmitting data that someone can get their hands on.
Or what about if you just use your mobile browser to login to your bank and have the login/password automatically saved? If you lose your phone or even leave it unattended and don’t have the phone locked down someone could easily pick it up and get into your account, or at the very least get some personal information.
Do You Use Mobile Banking?
Given how convenient mobile banking can be it’s no wonder people are quick to use it. I’ve done some mobile banking myself, but usually it’s just to get a quick balance when I’m not around a computer and don’t feel like waiting on hold. I also like the text alerts that Chase has where you can monitor your accounts and set alerts when they fall below a certain amount. I tested this last week and I set an alert to notify me when a checking account went under $500. I moved money around so that the balance in that account was about $550 and then went grocery shopping. The total came to about $80 so I swiped that debit card so that it would put me under my alert limit. Amazingly enough, my cell phone buzzed with a text alert from Chase before my groceries were even bagged! I thought that was pretty handy.
So, what about you? Are you a fan of mobile banking or are you a little uneasy about conducting financial business wirelessly from the palm of your hand?
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.