What is... | April 13, 2015

What is mobile banking?

It is often lauded for its anytime, anywhere convenience; however, there may also be other benefits – as well as down sides.


Mobile banking makes it easy to manage money on the go.  At a basic level, it lets people check their account balances, transfer money and do other financial transactions on a mobile device, such as smart phone or tablet.

Mobile banking is different from internet banking through a laptop or PC. It typically requires the use of an app.

It can be seen as part of the evolution in the way people use money. Many have moved from a world of mainly cash payments to one of ATMs and debit cards. Now we have apps, contactless payments, mobile banking and many other developments.

The ING International Survey has explored the topic in several years, including the Mobile Banking 2014 report that found mobile bankers tend to be young, have higher earnings and be well connected on social media.

Banking by text message
A close relative of mobile banking is banking by text message – often referred to as “mobile money”. This allows users to save, send and receive money using their mobile phone and, as explained here, is particularly popular in Kenya and other developing countries where large numbers of people do not have bank accounts.

Feeling more in control
Mobile banking appears to change the way people manage their money. In the ING 2015 survey, 85% of mobile bankers in Europe indicated their money management had improved since using the technology. Feeling more in control of finances was the most cited benefit. One-in-five said they had never missed a payment since using mobile banking.

Moreover, instead of wearing off over time as you might expect if people get bored of the technology, the positive effects actually appear to build the longer people use mobile banking.

Making it too easy to spend?
But technological change can end up having unexpected spin offs that are potentially harmful to choices on how to spend and save. The 2013 ING survey looked at whether people felt the “pain of paying” was reduced when using a credit card rather than physically handing over cash. It questioned if mobile and contactless payments take it a step further, with mobile bankers in the survey more likely to say they buy items on impulse.

In addition, the 2015 study found that mobile shopping – another time we make financial choices on the move – can leave people vulnerable to tempting shortcuts. Overall, 34% of people in Europe agree that if a store saves their payment details for one-click ordering, they are more inclined to shop there – a figure that rose to 55% among mobile shoppers.

Take the good – beware the bad
In the digital age, mobile banking appears to be helping people manage their money better – anytime, anywhere. Of those who have taken this next step in the evolution of money, the vast majority find helps them manage their money.

However, it may pay to watch out for unexpected consequences. Mobile bankers should still keep up with financial basics, such as tracking income and spending. It can highlight if anything goes off track and help stay in control.

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eZonomics team
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