Online Banking vs. Mobile Banking

November 29, 2019 | Mission Fed

Couple doing online banking with Mission Fed on their tablet.

Thankfully, the days of queueing at your credit union for every simple transaction are long gone. With the introduction of online and mobile banking, everyone now has the ability to access their account and certain functions and perform certain transactions without having to go to a physical brick-and-mortar building. Banking has never been easier, nor more accessible. Presently, 71% of consumers regularly use online banking, and 43% regularly use mobile banking.

While the two share convenience in common, online banking and mobile banking have distinctly different features. Find a detailed comparison of internet banking vs mobile banking below.

Online Banking vs. Mobile Banking: What's the Difference?

Nowadays, banks, credit unions, and other financial institutions offer both online and mobile banking. Whether you need to check balances, manage your savings account, transfer money, or make payments, you can do it all from the convenience of your mobile device.

The best way to discover the differences between online and mobile banking, is to define them and look at their capabilities.

What is Online Banking?

Before mobile banking, there was online banking. The main allure was the ability to conduct transactions from your computer without ever having to leave home. Today, online banking can be characterized by the following features:

  • The credit union or bank may be solely virtual, or have physical branches as well.
  • Typically, online banking is conducted using a laptop or computer.
  • The consumer must complete online registration with the financial institution then create a login ID and password.
  • Transactions are completed via the internet on the institution’s secure website.

Intending to eliminate the need to visit in person, online banking enables customers to do nearly every action they would typically do on-site. Unrestricted by location or operating hours, users may manage their finances, send money, and make payments at anytime and at any place, so long as they have access to the internet.

This list includes some of the functions that you can do through online banking:

  • Transfer funds from one account to another
  • View account balances
  • Pay bills
  • Open savings, checking, or other accounts
  • Apply for credit cards or loans
  • Order currency or checks

What is Mobile Banking?

Mobile banking is not restricted to a laptop or desktop, but instead requires the use of a smartphone or tablet; it has most of the same capabilities as online banking. There are, however, different methods of mobile banking including:

  • A mobile banking app
  • Text message (SMS) banking
  • Accessing the institution’s mobile version of their website

Mobile banking may generally not have as many capabilities as online banking, but that varies from one financial institution to another. The biggest advantage of mobile banking is the ability to conduct transactions from any location.

These are a few of the features that make mobile banking convenient:

  • Money Management — Having your statements and balances readily available can be helpful when spending with debit and credit cards. A quick glance at the app, can let you know just how much you have to spend or save.
  • Location Services — Still need an ATM, or to speak with on-site personnel? Easily find locations through the app.
  • On the Go — As long as you have data or WiFi, you can send or receive money. Forgot to pay a bill? Quickly send out your payment. Thanks to smartphones, you are also able to quickly snap a photo of a check and deposit it through the app.
  • Avoid Fraud — If you lose your card, you can report it missing or stolen- immediately. You can then freeze your account and prevent others from using your funds fraudulently. In addition, you can often order a replacement card. Additionally, you can set up SMS or email alerts to notify you of potentially fraudulent transactions.

The Cons of Electronic Banking

With all the convenient benefits of mobile banking, why bother with an old-fashioned brick-and-mortar account at all? People choose to have accounts at physical buildings, because there are some instances where you might need to conduct business inside a facility.

Technology-Dependent

Both online and mobile banking are dependent on having an internet connection, if you don’t have that-you may be stuck. Technology, as advanced as it is, can be prone to glitches, a limited WiFi range and outages.

Despite the convenience online banking offers, if you are not a technologically-savvy person, you may not find it easy to use online and mobile banking. In fact, only 18% of people over 60 use mobile banking — less than a third of a percent of 18-29 year-olds. Particularly with certain types of transactions, you may just find it easier to deal with a person than a computer.

When Going to a Physical Bank - Makes More Sense than Banking Online

Certain instances make face-to-face transactions preferable to digital:

  • Withdrawing large sums of cash
  • Acquiring notary services
  • Depositing cash
  • Conducting certain international transactions
  • Using safety deposit boxes
  • Getting an official check quickly

Digital Banking Security: Safe or Not?

The debate on online banking vs mobile banking may be futile if it isn’t secure. Even with continual improvements, there is a concern that online data is susceptible to hacking, however, financial institutions are acutely aware of this and of the risks associated with data breaches. They take cyber security very seriously. The addition of firewalls and encryption also keeps your personal information protected.

While there is always a risk of someone hacking your account, as a consumer you are not usually held liable for fraudulent transactions if you have reported it in a timely manner.

Here are some tips to help keep you safe:

  • Use your data instead of public WiFi when accessing your accounts
  • Don’t share your account information with anyone
  • Set up fraud alerts or transaction limits
  • Check your statements routinely for irregularities

Get Started Online Today

Armed with all the pros and cons of each banking system both online and mobile, you can decide which one works best for you.

With all the benefits of online and mobile banking, there is no reason why you should waste another 30 minutes waiting to speak with someone, when you could simply use digital banking. There is also no reason why you should have to pick between the two. Use both online and mobile banking to save your time and money. Set up your account and download the app today.

The content provided consists of opinions and ideas and should be used for informational purposes only. Mission Federal Credit Union disclaims any liability for decisions you make based on the information provided. References to any specific commercial products, processes, or services, or the use of any trade, firm, or corporation name in this article does not constitute endorsement, control or warranty by Mission Federal Credit Union.

Sources:

Investopedia. Online Banking. https://www.investopedia.com/terms/o/onlinebanking.asp

Nasdaq. The Pros and Cons of Online Banking. https://www.nasdaq.com/articles/pros-and-cons-online-banking-2014-09-03

Nerdwallet. Introduction to Online and Mobile Banking. https://www.nerdwallet.com/blog/banking/online-mobile-banking/

The Balance. What is Online Banking. https://www.thebalance.com/what-is-an-online-bank-315204

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