How Safe Are Mobile Banking Apps, Really?

According to the American Bankers Association, over 54% of bank customers use their banking app to manage their account. Using the app is the preferred way that people like to manage their money, but there you may be vulnerable to security concerns. It’s typically not the bank app that’s vulnerable, but rather you are subject to phishing attempts, fake banking apps and a weak password that compromise your banking data.

Reputable banking apps are generally safe, but keeping your account secure depends on your  banking habits.

Key Takeaways

• Banking apps are generally safe thanks to built-in protections like encryption, multi-factor authentication, biometric login and fraud alerts. Most breaches happen because of user habits, not the app itself.

• The biggest threats target you, not the app think phishing texts, fake lookalike apps, weak passwords, SIM swapping and public Wi-Fi. Staying alert to these scams matters more than the software you use.

• Protect yourself with simple steps: use a strong password, turn on biometric login and multi-factor authentication, download apps only from official stores, skip public Wi-Fi and enable real-time account alerts to catch fraud fast.

Summary generated by AI, verified by MoneyLion editors

What Makes Mobile Banking Apps Secure?

Mobile banking apps have built-in security features so you can focus on your bank accounts. Here are some of the security features that are used:

•  Encryption. Even if someone get access to your password, it’s scrambled enough through encryption that the hacker can’t get into your account.

• Multi-factor authentication (MFA). This is a second form of verification so that even if your password is compromised, your account is still safe.

• Biometric login. You can access your account only with your fingerprint or face. This type of login is one-of-a-kind so it prevents your bank account from being compromised.

• Fraud monitoring. Many banks send alerts regarding suspicious activities and out-of-the-ordinary transactions are flagged for your attention.

• Automatic logouts. If your account remains inactive for some time, the app will automatically log you out.

• Secure servers. Banks keep your data protected under multiple layers of security so it can be safe from hackers.

The Biggest Security Risks Aren't Always the App

If your bank information is compromised, the source of the hack isn’t the banking app. Hackers tend to target the users of these apps rather than the app itself. Here’s what makes you vulnerable to security risks:

1. Phishing. You receive fake texts or emails from hackers to con you into clicking on a suspicious link and giving your information.

2. Fake banking apps. Scammers create apps that replicate your bank app, but with mistakes in the logo or misspellings in the name. It looks so much like your bank app, that you may enter your login details.

3. Social engineering. Scammers call you and pose as your bank’s representative and con you to act fast or your account will be compromised. Since your fear may take over, you may react emotionally and relay important information.

4. Weak passwords. A password that’s easy to guess or is obvious will leave you vulnerable to having your information stolen.

5. SIM swapping. A scammer may convince a phone company to transfer your phone number to their device and then they’re able to receive your codes for verification.

6. Malware. If you click on a suspicious text, malware can read your passwords and key strokes to get your information.

7. Unsecured public Wi-Fi. Public Wi-Fi isn’t secure, so it makes it easy for scammers to steal your sensitive account information.

8 Ways To Make Your Mobile Banking App Even Safer

You can be proactive to make sure you’re keeping your mobile banking app safe. These are eight practical and easy ways to do so:

1. Always use strong passwords. Use a combination of letters, numbers and special characters that aren’t easy for a hacker to guess.

2. Enable biometric login and MFA. Even if your password is accessed, having MFA gives you a second layer of protection. Also, having a biometric login is difficult to duplicate since it’s your unique fingerprint and facial recognition.

3. Update your phone. If your banking app needs an update, don’t procrastinate and update as soon as possible.

4. Only download apps from trusted sources. Don’t download apps from a third-party you don’t recognize. Always download an app from the official app stores.

5. Don’t click on suspicious links. If  you don’t recognize a link, it’s likely a good practice to not be tempted to click on it.

6. Don’t use public Wi-Fi. Always use a secure internet connection even if you’re trying to bank on-the-go. 

7. Enable account alerts. If there’s a fraudulent transaction, using account alerts will help you identify a suspicious transaction in real time.

8. Review accounts regularly. It’s a good idea to monitor your accounts regularly so you are aware of any fraudulent transaction.

Signs a Banking App May Not Be Trustworthy

There are some signs indicating that you shouldn’t sign up for a particular banking app. If you see any of these red flags, think twice before signing up for the app:

• Poor reviews. Check out reviews online regarding the banking app and see how it's rated. A bank app that has few reviews and recent complaints may not be the most reliable option.

• Unofficial downloads. Only download bank apps via Google Play or the Apple Store. Apps that are accessed through third party vendors should be treated as unreliable.

• Excessive permissions. If an app is asking for information that isn’t related to your account information or seems excessive, you should likely pass.

• Missing privacy information. Bank apps should be clear about how it handles your data and keeps it protected.

• Outdated software. An app that has bugs or hasn’t been updated should also be a red flag.

What To Do If You Suspect Fraud or a Breach

If you suspect fraud, it’s imperative that you act immediately. You should do the following:

• Lock or freeze your account. You can lock or freeze your account online or by calling a bank representative. 

• Change your password. Be sure to change your password on your app.

• Inform the bank. Advise the bank that your account has been breached. They will likely issue you a new debit card.

• Review your transactions. Identity potential transactions that are fraudulent so that you can inform the bank.

• Enable security features. If you don’t have MFA enabled, you should add this layer of protection.

• Always monitor your alerts. You can save yourself from making a situation worse by immediately responding to the first suspicious alert.

Mobile Banking vs. Traditional Banking: Which Is Actually Safer?

It may be surprising, but mobile banking is likely safer than traditional banking. Mobile banking has built-in security features like encryption, biometric logins, real-time alerts and MFA capabilities. You can also monitor fraud as it happens because of account alerts. With traditional banking, you may not notice fraud until you receive your paper statement.

One upside to traditional banking is because it’s done in person, there’s little to no risk of phishing, malware, clicking on links or public Wi-Fi to worry about. However, you do risk having your checks stolen from your mail or someone watching your in-person transactions at the bank.

The Bottom Line

Protecting your bank account information on your app depends on your habits. Your banking app has multiple layers of security and encryption. To protect your safety, you need to have a strong password, use secure internet connections, enable MFA, use biometric logins and don’t click on suspicious links. If you do get hacked, it’s important to act quickly.                                                    

FAQs

Are mobile banking apps safe to use on public Wi-Fi? 

It’s generally not a safe move to use a bank app on public Wi-Fi. Public Wi-Fi can carry inherent risks, but if you need to use your bank app try a VPN.

Can someone hack my banking app?

It’s rare to hack a banking app because they are built with encryption and security. You’re more likely to fall prey to phishing attempts, a weak password or fake apps.

Is fingerprint or Face ID safer than a password?

Usually a fingerprint or Face ID is safer since these are difficult to steal or phish like a password.

Should I keep my banking app installed on my phone?

It's safe to keep your banking app on your phone since it’s equipped with security and encryption.

How do I know if my banking app is legitimate?

It’s best to use the Apple Store or Google Play and check to see if the developer of the app aligns with the source.

Key Terms

• Phishing: An online scam where attackers use fake emails, texts or websites to trick you into sharing private information like passwords or account numbers.

• Multi-factor authentication (MFA): A security method that requires you to present two or more credentials, such as a password plus a code or fingerprint, to verify your identity at login.

• Encryption: The process of scrambling data into unreadable code so hackers cannot access your information even if they intercept it.

• Social engineering: A tactic where scammers manipulate you into revealing sensitive information, such as a password, that can be used to attack accounts or systems.

• SIM swap fraud: A scam where a criminal convinces your phone carrier to transfer your number to their device so they can intercept verification codes and access your accounts.

Sources

• National Survey: Bank Customers Continue to Use Mobile Apps More Than Any Other Channel to Manage Their Accounts: American Bankers Association

• Tips for a Safe Mobile Banking App Experience: ANB Bank

• Spotting Red Flags When Sharing Your Financial Data With Third-Party Apps: ABC Bank

• SIM Swap Scams: How to Protect Yourself: Federal Trade Commission