Smartphone apps are fast becoming the most popular way for customers to interact with their bank, but which ones are genuinely ground-breaking, and how safe are they to use?
Barely a month goes by without a bank announcing more branch closures. Some claim that customers prefer to bank on the go – choosing a tap of an app over a trip to the branch – but can a mobile banking app really take the place of face-to-face interaction?
Data from the British Bankers’ Association (BBA) shows that the number of mobile transactions is rising at a rapid pace. Consumers logged into their mobile banking apps a combined 73.8 million times a week during 2015 – the most recent data available – compared to 18.6 million logins a week the previous year. During the same period, branch transactions fell by 6%.
Bank in your pocket
The quality of a bank’s app is becoming increasingly important to consumers, but which ones are the best? Six providers were selected ahead of the rest in the Moneywise Customer Service Awards 2017 category for best banking app. In a poll of almost 50,000 readers, Barclays, First Direct, Halifax, Metro Bank, NatWest and Royal Bank of Scotland were highlighted as offering the best mobile banking experience.
Each offers a wide array of functions including the ability to check your balance, view statements, make payments and see pending transactions.
Some offer more in-depth functionality. For instance, Metro Bank lets you block and unblock your debit or credit card on the move in case you lose it, while NatWest allows you to register your travel plans in advance, ensuring your card doesn’t get blocked while you’re abroad.
Apps can also offer vital assistance to people who would find it hard to make a trip to a branch. The NatWest mobile banking app was redesigned in 2016 to better support visually impaired customers and became the first to be accredited by the Royal National Institute of Blind People.
Money on the move
It’s not just big banks which are looking to make your financial life easier. Apps such as Android Pay and Apple Pay let you add your credit and debit card details and then pay with a swipe of your phone, rather than with the cards themselves. Think of them as a digital wallet. Both apps are supported by the majority of mainstream banks and can be used anywhere that contactless payment is accepted.
There is also a bank that offers its products exclusively through an app. Atom Bank has no branches, telephone service or desktop computer access, so all transactions are done through your smartphone. Users log in and verify their identity with either a PIN, face or voice identification. It is able to offer higher savings rates and cheaper mortgage deals due to its lower costs.
To help keep track of your finances, banking apps such as Monzo are also worth considering. This is an app and pre-paid debit card, which promises to give you greater understanding of your finances. Users load cash on to the card and spend normally, with the app updating in real time to show you what you’re spending, rather than taking days to appear on your statement.
For kids, the Go Henry and Osper apps work in a similar way to Monzo, but parents are also able to track their children’s spending. This gives children some financial independence, but lets parents keep a watchful eye.
Are mobile apps safe?
The number of cases of app fraud is small, but there are still some scams you should keep an eye out for. Make sure you download any apps from the App Store or Google Play to make sure you are getting the real deal. You can find links to these on your bank’s website.
Do not follow links in emails unless you are 100% sure they are genuine as these can be used by hackers to fool you into downloading fake apps.
The BBA has also warned about the dangers of ‘SIM swap’. This fraud takes place when a criminal impersonates a customer and requests a new SIM card from their mobile provider. The fraudster then uses this new SIM to reset online and mobile banking passwords in order to steal personal data and raid their bank accounts.
On the whole, apps are no less safe than any other forms of banking – just make sure to keep you passwords and account details protected.
Moneywise team pick: First Direct
I’m a big fan of First Direct – the service in its call centres is fantastic, making telephone banking a breeze. However, I don’t always want to phone up to check my balance or make a payment, and that is where banking apps come into their own.
For some time I thought First Direct’s banking app was its big weakness: I couldn’t do everything I could with internet banking and logging on with a code that needed to be generated every time I used it was a faff. It was easier to lug out the laptop than struggle with my phone.
That has all changed since the introduction of new features including fingerprint log-in, which allows me to access my account instantly, and the ability to set up payments to new people. I can also set up, cancel or amend standing orders and cancel direct debits in addition to moving money and seeing all my recent transactions.
Moneywise team pick: PayPal
It’s a pain having to input your card details into a website when you make a purchase, especially if you’re viewing the site on a smartphone or tablet. There is also the worry that the site may not be as secure as you hope, and the more often you share your details and set up passwords the greater the possibility you may become a victim of fraud. That’s why I’m always happy when I see the site accepts PayPal.
With PayPal, I can either pay with funds deposited with it or route the payment through to my credit card or bank account without sharing the details with the website vendor. PayPal will also pay the vendor, but not take the money from my account until the ordered item has arrived, protecting me from being scammed.
You can also use PayPal to pay in some restaurants, so no worries about your credit card being skimmed. Lastly, you can send money directly to friends who also have PayPal accounts. This avoids having to give out your bank account details over email or text message.
But remember that PayPal purchases aren’t covered by Section 75 of the Consumer Credit Act. This is available on all credit card purchases for items costing between £100 and £30,000 and protects you in case something goes wrong, such as the retailer going bust. PayPal purchases, like those made with debit cards, do not offer this protection.
Moneywise team pick: Monzo
Ask my colleagues here at Moneywise and they’ll tell you I won’t stop banging on about my Monzo card and app. Indeed it has gathered something of a cult following, at least among my peers. Even the flashy ‘hot coral’ card tends to draw comments whenever I use it.
I grew very tired of using my current account’s app and online banking for tracking my spending. It would take days to update or show the correct balance, what the payment was often wouldn’t be clear, and logging into it is an onerous process with multiple layers of security. Not so with the Monzo app. The app gives me an immediate notification when I spend and clearly categorises what that money was spent on. If nothing else, it has taught me I spend too much on eating out!
The card itself is excellent for use abroad and does not incur any fees whatsoever. A flaw in the Monzo system, perhaps, is that the app does not require any security to access other than standard security on your phone. However, there are security benefits too. If you were to lose your card, you can put a temporary ‘freeze’ on it until you either find the card or confirm it is gone.
Nominees for best banking app
- First Direct
- Metro Bank
- Royal Bank of Scotland
Winner to be revealed in August’s Moneywise magazine.