Are mobile banking apps safe?

Mobile banks (AKA challenger banks) are the modern way to manage your money. These types of banks should not be confused with traditional banking that offer a mobile app as part of their service. Mobile banks are typically app only and do not have brick and mortar branches. They are also typicaly more advanced than traditional banks in the features they offer.

So how do these banks stack up when it comes to security and keeping your funds are safe?

3 reasons that mobile banking apps are safe

1. Deposit protection guarantees

Many mobile banks form part of government deposit guarantee scheme (DGS/FSCS). These are 3rd party independent institutions that guarantee your funds are protected up to a certain amount (usually around €100k/£85k). In the case that your bank fails in their duties to protect your money you can make a claim through these instituations to recover your funds.

When looking to choose a mobile bank, you should always check to see what level of deposit protection guarantee they offer.

2. Real time Notifications & Blocking

Mobile banks send you a mobile message as soon as a charge is made to your account. This adds a level of safety that very few traditional banks offer today. In addition to that, they allow you to block any of your cards directly from the app with a single button click. No need to call any support centers. These two features ensure that your funds are very well protected from anyone that has stolen your card.

3. 3D Secure

When making online purchases, most mobile banks offer 3D secure options. With 3D secure, any purchase made through an online shop needs to be confirmed in real time from the mobile app. This ensures that no online purchases will go through unless verified by the mobile with the number assigned to the account and only if the person verifying can log into the app.

Conclusion - Moble banks are safe

Mobile banking apps are considered very safe and in some cases have features that are even safer than your traditional bank.

It's understandable that many people are reluctant to switch their banking to a mobile only app espeically since many of these companies are quite new and unknown. Since there is no minimum deposit amount, many start small by keeping their traditional banking account and depositing only small amounts into the mobile baking app. Since these banks offer an easy, free way to top up the account then this allows a low risk way to try them out without any high costs or risks.