What is mobile banking?

Mobile banking is a service that allows you to access your bank accounts, and make transactions using an app or the internet, on your smartphone or tablet. 

On this page, we’ll take a look at the meaning of mobile banking, the financial services you can access on a mobile banking app, the benefits of mobile banking, and how safe it really is.

Mobile banking is a bit like having your bank in the palm of your hand. You use a mobile device, such as a smartphone or tablet, to handle transactions and other money-related tasks, whether that’s getting alerts on account activity, paying bills, or sending money overseas. With mobile banking, you’re not tied to a physical bank branch – you can bank on the go, from anywhere. 

And it’s not just for personal accounts. Businesses can also use mobile banking for things like payment processing, and even receiving funds directly to their phone numbers to save time.

Mobile banks and digital banking as a whole are becoming increasingly popular in the UK, with over half of Brits interacting with their main banking provider via smartphone apps at least once a month, and 18% engaging daily*. And while the upsurge in mobile banking in the UK has mainly been driven by users in the 18-34 age group, over 55s have also increasingly adopted banking technology in recent years.

The main difference between mobile and online banking concerns their functionality and accessibility. You generally access online banking through a PC or laptop with an internet connection, while an app is usually required to bank on a mobile. However, there’s some overlap, since most mobile banking apps require you to have registered for internet banking first. And you don’t necessarily have to download an app to access mobile financial services - you can also log in to your internet banking on a mobile internet browser. 

Both platforms let you do the basics, like checking balances and transferring funds, but online banking tends to provide a wider range of functionalities. Mobile banking apps are designed for on-the-go use and may offer fewer features, but they provide convenient access to banking services when you’re out and about. Keep in mind, though, that while some basic functions of mobile banking may be available offline, things like transferring funds and making changes to your account usually require an internet connection.

The particular features available with a mobile banking application will vary depending on the financial institution. However, some of the most common services you can expect include:

• Mobile payments for bills, shopping, and peer-to-peer transactions

• Money management tools including tracking loans and investments

• 24/7 access to account and instant mobile bank statements

• Account management features such as balance checking, transaction viewing, and setting up payments

• Digital features like secure login with biometrics, third-party transaction consent, and customer support via chat

• Card management functionalities including paying credit card bills, freezing/unfreezing cards, and reporting lost or stolen debit cards

• Paying in cheques via mobile banking app by taking a photo of the cheque

• Some fintech companies and mobile banks offer money saving apps, with services like round-up features to save as you make purchases.

The specific process will vary depending on your bank. To start using mobile banking, you usually have to download and install your bank’s mobile app on your device. Once installed, you’ll need to log in to the mobile banking app using your existing account credentials, or set them up if you’re a new customer. This typically involves verifying your identity through a combination of your online banking PIN, password, and mobile phone number confirmation.

It may be that you have to create an MPIN (mobile banking personal identification number) for login security. You’ll also be prompted to set up a passcode and choose your preferred login method, such as fingerprint scanning or facial recognition, if available. You can then get started, changing your individual preferences within the app.

No, you don’t always need online banking to use mobile banking, but, as always, this will depend on the particular mobile banking provider you opt for. You typically have two options: either set up online banking with a traditional bank and then download their mobile app; or opt for a mobile-only bank, such as fintech mobile banking apps. With both online banking apps and fintech apps, an internet connection is required to manage your finances and make transactions.

Mobile banking can be a convenient option for managing your finances, including paying bills, sending payments, and making mobile deposits directly from your device. 

Some of the advantages of mobile banking include:

• You can access your money wherever you are, providing flexibility and convenience. This is particularly useful considering many high street banks are closing some of their physical branches.

• Money transfers are simplified, allowing for quick and easy transactions.

• It’s usually fairly straightforward to open a new mobile banking account - you don’t have to fill out a pile of application forms.

• You have quick and easy access to other banking services, such as checking balances and viewing transactions.

And here are some of the disadvantages of mobile banking:

• You may encounter technical issues with mobile banking applications, and some apps are only compatible with the latest operating systems.

• It can be difficult to access in-person customer support with mobile banking.

• You may encounter security issues, making it important to be careful when using the app to protect your personal information.

For some users, it can also be quite a steep learning curve to transition from in-branch to digital banking services like mobile banking.

When it comes to the safety of digital banking methods, mobile banking offers some advantages over online banking. Mobile banking apps often incorporate biometric authentication, such as facial recognition or fingerprint scanning, which adds an extra layer of security compared to traditional username and password logins used in online banking portals. Also, mobile banking typically doesn’t store data locally on devices, reducing the risk of data breaches. 

However, it’s important to note that mobile banking isn’t without risks, as highlighted by the 2021 State of Mobile Finance App Security report, which found that a significant percentage of mobile banking apps have security vulnerabilities that could compromise personal data. While mobile banking on both iPhone and Android devices benefits from built-in security features and regular updates, it’s generally recommended to keep informed about how best to protect your banking data and finances. Read our guide if you think you have been scammed.

*https://yougov.co.uk/economy/articles/27426-third-brits-dont-use-mobile-banking

At Raisin UK, we offer an app with robust security, where you can easily apply for savings accounts with competitive savings rates, and manage all your savings in one place. We only partner with banks and building societies protected by FSCS, or the European equivalent, meaning that all deposits are protected up to £85,000 per person, per institution. Find out how Raisin UK works, and set up a free account today!

No, mobile banking apps are usually free, especially if you’re setting it up with an existing account from a high street bank. But of course, this will vary depending on the banking provider. As a rule, basic mobile banking services, including current accounts and transactions, are typically offered free of charge. Some fintech apps offer premium accounts or accounts for investments, which may come with a monthly fee. Others offer a limited number of free transactions each month.

Yes, you will need an internet connection on your mobile device to access and manage your finances through mobile banking. While some basic features may be available offline, such as checking your account balance, everything else usually requires you to be connected to the internet. Mobile banking apps tend to offer the same features you’ll find in online banking but optimised for smartphones and tablets.

While there’s no one answer to the best app-based banking providers, it can help to consider which banking features you think would be most useful. Popular app-only options include banks like Starling, Monzo, and Revolut, and each offer their own unique benefits, such as budgeting features, spending alerts, and spending abroad with no restrictions. It’s often helpful to work out which features best suit your priorities when deciding which to go for.

To make a payment via mobile banking, you typically select the payment option and add the details of the recipient. You then specify the amount you’d like to send and include any relevant reference details. Depending on the mobile banking platform, you may need to provide additional information or authentication, such as a password, fingerprint, or facial recognition. Once confirmed, the payment will be processed, and you’ll typically receive a confirmation or receipt.

While accessing your bank on a mobile device is generally safe, there are some steps you can take to minimise the risk of your private information ending up in the wrong hands:

• Download the official banking app from your bank’s website.

• Ensure your bank offers two-factor or multi-factor authentication.

• Use a strong, unique password.

• Avoid public Wi-Fi networks when accessing your mobile banking.

• Be aware of phishing attempts; don’t click on any suspicious links.

• Set up alerts via email, text, or the bank’s app for account activity monitoring.

• Use secure, encrypted websites for transactions.