The Do’s and Don’ts of Mobile Banking

By Mike Peterson
In September 23, 2013

If you’re like me, you remember the days when you had to swing by an ATM machine or call your bank’s toll-free 1-800 number to verify your account balance or make sure a check cleared.  That seems like a lot of effort, but it was still faster than going to the actual bank or waiting for your monthly statement to arrive in the mail. 

Times sure have changed, haven’t they?  Today, if you have a smartphone or tablet, you can sidestep the automated phone systems and extra ATM visits and use a banking app to check your account, transfer funds, and even pay your bills from almost anywhere!  Mobile banking is a huge time saver – and because banking apps make it super-easy to stay informed about your money, mobile banking can also help you avoid things like overdraft fees. 

Of course, all of that convenience does come with a small downside:  Mobile banking can put you at a slightly higher risk for theft or fraud.  But don’t panic:  As long as you take the right precautions, you can rest assured that your banking information is safe from wannabe thieves.

That’s why I created this list of do’s and don’ts for mobile banking.  If you follow these tips, you can enjoy the ease and convenience of smartphone banking – without any of the risks.

If you plan to use mobile banking:

  • DO set a password on your smartphone.  Our phones aren’t just phones any more.  They’re our daily planners, our alarm clocks, our social centers, and, in many cases, they’re full of sensitive data like banking and credit card info, email, and more.  Setting a password makes it more difficult for anyone but you to access the information stored on your phone (same goes for a tablet-type mobile device like an iPad).  And, it’s very easy:  You can set up a password in a few simple steps by going to your phone’s “Settings” menu.

 

And speaking of passwords . . .

  • DO create challenging passwords.  A good password should contain a combination of letters, numbers, and symbols such as “!”, “$”, or “&” – and it shouldn’t be something obvious like “PA$$WORD.”  Also, don’t use your smartphone password as your mobile banking password or vice versa – come up with a unique password for each one.  That way, even if your phone is lost or stolen, it won’t be easy to get to your sensitive information.
  • DON’T save your passwords and login info.  Chances are, your banking app gives you the option to store your username and password, so you don’t have to go through the trouble of entering them every time you want to log in and check your balance.  Sounds convenient, right?  Well, it is.  In fact, it’s a little too convenient.  When you store your login information, you make it easier for anyone who happens to find (or steal!) your phone to access your account.  Sure, it may take a minute to enter your username and password, but isn’t the peace of mind totally worth the extra effort?
  • DO download banking apps directly from your bank.  It’s easy to assume that if an app is available for download through your phone’s app store that it’s safe for use.  Unfortunately, though, it’s not unusual for a bad app to slip through the cracks unnoticed.  Download the wrong app and you could be sending your banking info to some less-than-legit places.  The best way to make sure that your banking app is on the up-and-up?  Download it directly from your bank’s website and skip the app store altogether.
  • DON’T ignore app updates.  Yes, it can be a little annoying to see that your bank has released version 50.234567 of its mobile banking app (I mean, come on — they just released version 50.23466 last week!).  In most cases, there’s not even a noticeable difference between the older version and the latest one.  But often, it’s what you don’t see that matters:  The latest version may contain important security updates!  Do yourself (and your bank account) a favor and keep your apps current. 
  • DO surf the web with caution.  If you’re like most people, you occasionally kill time by surfing the web on your phone or tablet – maybe you like to search for funny videos or check out the latest game or movie reviews.  Maybe you prefer to catch up on sports or the news.  Whatever you like to search for, try to stick to sites that you know are legit.  Now, I’m not saying that all unfamiliar websites are bad news – but the more strange websites you visit, the more likely you are to expose your phone or tablet to malicious software that can record your keystrokes or steal your passwords.  Better safe than sorry.
  • DO be extra careful if you use an Android device.  At the moment, there are more malware programs out there that are targeted toward Android phones.  Of course, that doesn’t mean that if you have an Android phone you have to avoid mobile banking – but it does mean that you should be even more conscientious about using passwords and even more careful when surfing the ‘net. 

But if you’re an iPhone or iPad user . . .

  • DON’T be lulled into a false sense of security.  Sure, Androids are getting hit harder at the moment, but that could change.  Exercise caution no matter which type of device you use!
  • DO wipe the data from your old phone or tablet.  When it comes time to upgrade your smartphone or tablet, make sure you remove ALL of the data stored on your old device before you sell it, give it away, trade it in, or recycle it.  The data-wiping process varies a little depending on what kind of device you use.  Check your user’s manual or do a quick Google search to find out how to erase your phone.

Mobile banking is quick and easy — and, as long as you take the proper precautions, it’s just as safe as traditional banking.

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.