Mobile banking
Mobile banking refers to banking activities conducted via mobile electronic devices such as smartphones and tablets. This modern approach revolutionizes traditional banking methods that previously required physical visits to banks or ATMs. With the evolution of mobile technology, banks developed mobile applications and optimized websites, enabling users to perform a range of transactions on the go. Initially, mobile banking emerged through SMS technology, allowing users to check balances, which later expanded with the advent of smartphones to include deposit capabilities, money transfers, and electronic payments.
Mobile banking has grown significantly in popularity, particularly during the COVID-19 pandemic, with a reported 48 percent of Americans utilizing it as their main banking method by 2023. Key features valued by users include the ability to transfer funds, deposit checks remotely using phone cameras, and access account statements. However, despite its conveniences, security concerns remain a significant barrier for some users. To address this, many banks have implemented advanced security measures like Touch ID for added protection. Overall, mobile banking represents a significant shift in how individuals manage their finances, providing flexibility and accessibility in a fast-paced world.
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Mobile banking
Mobile banking is banking activity carried out using a mobile electronic device, such as a smartphone or tablet. Before mobile banking, individuals deposited, withdrew, or transferred funds at physical banks or automated teller machines (ATMs), by telephone, or online via personal computers. As mobile devices grew more advanced, various banks began to introduce mobile applications, or apps, and mobile-optimized websites that enable users to conduct banking transactions while on the go.
Overview
In the early days of modern banking, individuals seeking to deposit or withdraw funds were typically required to visit a physical banking center and speak with a teller. (Some banks also allowed account holders to bank by mail.) In the early 1970s, ATMs became increasingly popular, allowing users to check account balances or access their money without visiting a bank. Telephone banking was soon introduced, and online banking followed as Internet access became more common.
Although these services allowed consumers to perform financial transactions at nearly any time, they still required users to be near a specific location or object—a bank, an ATM, a computer with Internet service—or to be in a sufficiently private and quiet place to conduct telephone banking. However, with the widespread introduction of Internet-enabled cellular phones, new possibilities began to present themselves. Early mobile banking relied on short message service (SMS) text-messaging technology and allowed users to perform simple transactions such as checking account balances. As mobile Internet capabilities developed, banks began to create simple, often text-only websites through which users could access their accounts. With the introduction of the smartphone, mobile banking capabilities increased dramatically. Banks began to make banking-specific applications, or apps, available for download and also introduced mobile-optimized sites that included all the content and features of the desktop websites but were formatted to fit smartphone and tablet screens more comfortably.
Modern mobile banking services typically allow users to check balances, make a deposit, transfer money, make electronic payments, and locate nearby ATMs and banking centers. Using mobile-optimized bank websites, users can also apply for credit cards and loans, open new accounts, and invest in mutual funds. Beginning around 2009, several banks began experimenting with allowing mobile banking users to deposit checks remotely. Taking advantage of the cameras incorporated into most mobile phones, these banks enabled customers to photograph signed checks and deposit the money into their accounts. This technology soon became a common feature of mobile banking apps.
Mobile banking has become increasingly popular since its introduction. According to a 2021 Federal Deposit Insurance Corporation (FDIC) National Survey of Unbanked and Underbanked Households, 43 percent of Americans used mobile banking as their primary banking method. In 2023, the American Bankers Association (ABA) found that the percentage, which increased throughout the 2020s, was even higher at 48 percent. The ABA cited the COVID-19 pandemic as an accelerating factor. According to a poll by Forbes Advisor, the three most valuable mobile banking app features were the ability to transfer funds between accounts, mobile check deposits, and view statements and balances. At the same time, despite advanced biometric technology, many mobile phone and smartphone users still refrained from using their devices for banking because of security concerns. Some banks have begun offering Touch ID with their banking applications, which provides an extra layer of security through fingerprint recognition technology.
Bibliography
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