According to research done by the Neilsen Company, 9 out of 10 people have a cell phone and more than half of those people have smartphones. A smartphone is basically a small hand-held computer that allows you to access email, the Internet, make a phone call, or run applications. A growing number of financial institutions now offer mobile banking so customers can use their smartphones to check their balance, find the nearest ATM, pay a bill, or even transfer funds from one account to another. With all this technology, consumers need to understand the services offered and to be careful to protect their personal and financial information.
There are many mobile banking services available. For example, some institutions offer to send customer alerts to cell phones in the event that an account becomes overdrawn or if suspicious activity is detected on their account. This is a great tool for someone who travels and may not access their account on a regular basis or for someone who uses debit cards worldwide. Some institutions have created their own “app” that is available as a smartphone download in order for people to access accounts and process transactions.
But with all of this great technology, consumers need to decide what is right for them and what are they comfortable using. Some consumers are more open to the concept of mobile banking and are willing to pay for those services while others are more reserved and concerned about security or fees associated with the technology. Here are three basic things to think about if you are considering using mobile banking:
- Does your banking institution charge for mobile banking? Most do not, but don’t just assume this is the case.
- What can you do to protect your information should you choose to use mobile banking? Always make sure your phone and your mobile banking application is password protected. Don’t choose an obvious password like 1234 or your initials. By password protecting your mobile banking, you are protecting yourself should you lose your phone. A web or application-based mobile banking system is more secure than those that use text messaging. It may sound silly, but you may want to consider purchasing an anti-viral software for your phone or mobile device. It is only a matter of time before the very viruses that invade home computers will try to invade smartphones.
- Know the risk. Before you sign up for mobile banking, know and understand the risk if something goes wrong. Be sure to understand how the system works and if there are time lags between you making the transaction on your phone and when the funds are available. Also, understand what happens if you transfer money to the wrong place… what is your liability? Some institutions now allow you to do “P2P” transactions where you can transfer a small amount of money to a family member or friend from your phone. They are called “person to person” payments and can be very convenient. But be informed and ask what fees and liabilities might be associated with this service.
Mobile banking certainly can help you keep better tab on your accounts if you are busy or if you travel a lot. However, you need to decide if the risk is worth the gain. Taking the time to be informed and understanding the latest and greatest product may save you a lot of money and hassle. Talk to your institution and let them explain how their mobile banking works, talk to your friends and co-workers to see how they like it and figure out what works best before you decide. Making an informed decision means taking a little time now to potentially save a lot of time and effort later.