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Is Mobile Banking Safe?

August 26, 2020 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Is Mobile Banking Safe?

People are increasingly relying upon mobile banking apps. A study shows how they are among the most widely used apps in the United States today, along with social media ones and apps providing weather reports.

Mobile usage in North America has climbed over the past year, with nearly 57 million consumers saying they use mobile banking. This is an even more common practice for Millennials.

However, another research shows that almost one third of Americans distrust mobile banking. And, younger Americans are nearly as worried as older generations with hacking and malware as two of the top concerns.

So, is mobile banking safe? Are mobile banking apps secure? How concerned should you be when banking online? Are all apps equally safe/unsafe? How can you improve your online security when you conduct transactions? Are mobile banking and online banking the same? If not, which type is safer to use?

This post will dive into these types of questions. But, first, no—not all banking apps are the same or come with the same degree of security sophistication. Some choices, then, are safer than others.

How is Mobile Banking Different from Online Banking?

At its simplest, mobile banking occurs when a person makes a financial transaction through the use of a mobile device, such as a cell phone or tablet.

Transactions range from pretty simple ones, like signing up to have your bank send you informational text messages, to bill paying, sending money to other people in the United States or internationally, receiving funds, and so forth.

Traditional, brick-and-mortar financial institutions are increasingly offering internet-based services, and there are now mobile lenders that don’t even have an actual building for customers to use. Their mobile devices and apps are their branches.

Here’s something else to consider. Not all internet-based banking transactions are mobile ones. Mobile banking is a form of online banking, but it’s not the only type. You could, for example, conduct financial transactions on your home computer. That’s online banking, but it’s not mobile banking.

Is Mobile Banking Safer?

Some may believe that mobile banking is safer than online banking, while others disagree.

Ways in which mobile banking can be safer include how well-designed apps don’t store data, which makes that data harder to illegally obtain.

Plus, you’re less likely to need to deal with a smartphone virus than a computer one. And, overall , “Mobile phones have more security natively…the apps are more protected than the open website experience.”

To toss in another factor when comparing safety, not all banks use the same security procedures across channels. For example, some financial institutions may use multi-factor authentication technology on their mobile apps, but they don’t use the same level of security on their websites.

Protecting Yourself

A couple of quick and easy things you can do to protect yourself include to:

•   create a strong password for your accounts
•   avoid conducting transactions on a public computer
•   avoid using public WiFi for your transactions
•   make sure your bank is FDIC-insured
•   keep your phone updated to take advantage of the latest security measures available

The good news is that technology continues to improve in ways that boost security. A security measure being used by many financial institutions today is two-factor authentication, also called 2FA, or two-step verification. In authentication processes, there are typically three factors:

•   something you know (your password, for example)
•   something you have (such as your smartphone)
•   something you are (which could be your fingerprint, face, or retina)

In two-factor authentication, users must provide at least two forms of ID, such as the password and a fingerprint.

Or, the secondary authentication could be a numeric code that the user requests and receives via text. This code can only be used one time, preventing it from having value to hackers in the future.

Activity monitoring or user activity tracking can also boost security. In general, this involves software that monitors user behavior on devices to identify suspicious behavior.

Then, risk management can take place to help prevent data breaches or minimize damages. Another security measure is the ability to freeze an account if malicious activity is suspected.

If you’re unsure about what measures your bank takes to protect your data, it’s reasonable to ask the question. If you’re not satisfied with the answer, it can help to explore other options.

Online-Only Account Options

Traditional banks, credit unions, and so forth often provide internet-based services for customers. This section, though, will take a look at the pros and cons of online-only banking, meaning online institutions with no physical locations.

When there are no brick-and-mortar locations, banks can keep overhead costs low—which, in turn, allows them to offer perks over traditional banks, such as higher savings account rates.

Often, though, these online savings accounts limit how many transactions a customer can make a month, which is another way that online banks may cut costs. Limits vary by institution.

Traditional banks may require minimum balances, or require automatic deposits. If those conditions aren’t met, they may charge you a monthly fee. Some online financial institutions, though, don’t make that a requirement.

Online banks have convenient hours, typically open 24 hours a day. This can be helpful for people who can’t necessarily bank during regular hours. Typically, online banks participate in a network of ATMs, perhaps Allpoint or MoneyPass.

These ATMs usually don’t have fees. And, if an online bank isn’t part of an ATM network, the institution may offer to refund related fees up to a certain amount.

With mobile banking, you can deposit a check into your account using your smartphone or tablet camera. Usually, you need to endorse the check, and take a photo of the front and back—some institutions may have additional requirements.

Mobile depositing can be quite convenient, and you can generally use the service 24/7, with deposits typically showing up that day or the next, depending upon the bank’s rules and the time of your deposit.

This service saves you from making as many trips to ATMs—you can deposit checks from anywhere you have a mobile device, and funds are available quickly.

Banks may have limits on how much you can deposit in a day or month, and they will have a funds availability policy that will help you to know how long the institution will place a hold on a particular check, either partial or in total.

Although most online banks provide a customer service line, they usually don’t provide access to a personal banker who can help you to set up accounts, apply for loans, or discuss an issue you’re having. Another challenge associated with many online banks: They keep fees low by limiting the range of services offered, and may not offer checking accounts.

Finding a Mobile Banking Solution

SoFi Money is a cash management account has no account fees. With SoFi Money you can spend, save, and earn all in one place. We work hard to charge zero account fees. With that in mind, our fee structure is subject to change at any time.

Additionally, SoFi takes protecting your account seriously. If you see unusual or suspicious activity on your account, or lose your SoFi Money card, you can freeze your card instantly online or by using the app. If unauthorized activity takes place, simply contact us and we’ll help you to resolve the situation.

•   Each card chip generates a unique transaction code—making it hard to copy.
•   We provide two-factor authentication. To sign into your account, you’ll need your passcode, along with either a security code or fingerprint recognition.
•   We provide activity monitoring. If there is suspicious account activity, we’ll contact you and, if needed, restrict the account until the concern is addressed.
•   If you travel, you can set a notice to help prevent usage interruption. To set the travel notice, simply call SoFi Money® Customer Service at 1-855-456-7634, one-two days ahead of your travel, and let us know the location and timeframe of your travel.

Getting started with SoFi Money is fast and easy!


External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Each business day, cash deposits in SoFi Money cash management accounts are swept to one or more sweep program banks where it earns a variable interest rate and is eligible for FDIC insurance. FDIC Insurance does not immediately apply. Coverage begins when funds arrive at a program bank, usually within two business days of deposit. There are currently six banks available to accept these deposits, making customers eligible for up to $1,500,000 of FDIC insurance (six banks, $250,000 per bank). If the number of available banks changes, or you elect not to use, and/or have existing assets at, one or more of the available banks, the actual amount could be lower. For more information on FDIC insurance coverage, please visit www.FDIC.gov . Customers are responsible for monitoring their total assets at each Program Banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The deposits in SoFi Money or at Program Banks are not covered by SIPC.
SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank.

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