What is Mobile Banking?

Written by Meagan DrewUpdated: 29th Sep 2021
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Phones are not just for phone calls anymore. The smartphone evolution brought access and integration of nearly every facet of life to our fingertips.

Users can surf the internet, listen to music, see friends in faraway places, edit photos to crisp billboard size resolutions, all with the touch of a screen. These advancements have made banking easier than ever too.

What used to involve driving to a bank, standing in line, collecting stacks of paper, and making sure you did it all inside business hours has been reduced to as little work as just opening a phone application or app.

What is Mobile Banking?

Mobile Banking is a service provided by a bank or financial institution that allows customers to access their information and manage account aspects from a remote location on a device such as a smartphone or a tablet by using their app.

>> More: Best Online Bank Accounts

How does Mobile Banking Work and How to Set It Up?

All you need to get started with Mobile Banking is a smartphone or tablet, internet access, and an account at your financial institution of choice- though some financial institutions will even let you set that up online!

You are going to want to make sure that you either follow directions given by your institution to download their app or access their app by following a link directly from their website to ensure you are getting the right one.

Often these apps will require a new username and password exclusively for your Mobile Banking access.

The app may ask you for other identifying information and ask you to confirm your email before allowing you to use features.

As soon as you are verified, you will be able to use the app to do things like track balances, transfer funds, pay bills, and even deposit checks.

>> More: How to Open a Bank Account Online

Is Mobile Banking Safe?

Security is obviously a major concern for most customers when they think about mobile banking. Financial institutions use vetted security practices and encryption to keep customers information safe.

Exercising basic safety protocols on your end also will help ensure you have the safest experience mobile banking possible.

The most important thing you can do to protect your information is to choose a strong and unique password.

This is not the time to reuse the same password you have been using since you got your first Hotmail account in 1999. Your pet’s name is not ideal, either.

If you are concerned about security, it is best to avoid public wireless internet or Wi-Fi networks when accessing your banking information.

Public Wi-Fi is an excellent idea to save on data usage but disconnecting and using your cellular data for secure banking is the best practice.

Two-factor authentication is another development in the mobile banking world that helps keep your information safe. You will need to set up two-factor authentication and confirm it from inside your account.

In the future, it will send a text or email to the pre-established account after entering password information every time someone logs into the account.

It seems tedious at first, but it will keep someone from accessing your information by just knowing your password.

Face ID and fingerprint technology also take safety one step further on your device. Additionally, you will want to ensure that your device stays up to date because the software updates strive to improve your device’s security and not just interrupt your solitaire tournament.

>> More: Best Checking Accounts

What are the benefits of Mobile Banking?

The most obvious appeal of mobile banking is convenience. Hours of operation and lines are no longer a consideration as mobile banking is available 24 hours a day and 7 days a week as long as you have your device and an internet connection.

Mobile banking apps have also replaced check books for most people since there is real-time feedback on account balances and pending debits.

No more swiping and praying. Mobile banking also allows for consumers to go completely paperless as there is always access to account statements and important banking docs.

Advantages of Mobile Banking:

  • 24/7 access
  • Account Control
  • Consolidation of Important Documents
  • Time-Saving

Disadvantages of Mobile Banking:

  • Require a smartphone or tablet
  • May result in data usage fees
  • Lack of relationships
  • Limitations on deposits

How can you use Mobile Banking?

Mobile banking allows you to do much of what you can do in your brick-and-mortar financial institution from the comfort of your couch or wherever your banking needs pop up.

Obvious perks are the ability to check your balances, transfer funds, access important banking documents and pay bills.

One of mobile banking’s biggest flexes is the ability to deposit checks into your accounts right on your device just by using your camera.

Enabling location services will help you find ATMs or branches near you if you need to stop in or require cash.

Mobile banking also allows you to set up account alerts such as reminders to pay bills, low balance notifications, and large purchase alerts.

>> More: Best Bank Accounts

Mobile Banking vs. Online Banking

Mobile banking and online banking are closely related and provide many similar features, but they are not the same.

Online banking refers to transactions that take place over an internet connection on the bank’s website. While smartphones or tablets can be used to conduct business, desktop computers can also be used to log in to online banking.

There are no applications used in online banking, whereas mobile banking is performed via a proprietary application from the financial institution.

Mobile banking also allows for location services to help customers find banks and ATMs nearest to their location. Mobile banking also allows for check depositing, and online banking does not.

Mobile banking may be slightly overwhelming for first time users, but it is a safe and effective way to manage your account.

When you are ready to give mobile banking a try: download your financial institution’s app, set it up, and get started! It is easier than you think.

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Meagan Drew
Meagan Drew

Meagan Drew is a Senior Personal Finance Writer & Product Analyst with 7 years experience in wealth management. As a former Series 7 and 63 certified advisor, Meagan specializes in making financial topics relatable and consumable, no matter the reader’s experience level. She attended the United States Military Academy at West Point where she studied Nuclear Engineering. Meagan is a veteran, military spouse, and mom of 4 currently living in Colorado Springs. Her areas of expertise are military personal finance, credit cards, personal loans, investing, and wealth management.