Loading the player...

DEFINITION of 'Mobile Banking'

Mobile banking is the act of making financial transactions on a mobile device (cell phone, tablet, etc.). This activity can be as simple as a bank sending fraud or usage activity to a client’s cell phone or as complex as a client paying bills or sending money abroad. Advantages to mobile banking include the ability to bank anywhere and at any time. Disadvantages include security concerns and a limited range of capabilities when compared to banking in person or on a computer.

BREAKING DOWN 'Mobile Banking'

Mobile banking is very convenient in today’s digital age with many banks offering impressive apps. The ability to deposit a check, to pay for merchandise, to transfer money to a friend or to find an ATM instantly are reasons why people choose to use mobile banking. However, establishing a secure connection before logging into a mobile banking app is important or else a client might risk his personal information being compromised.

Mobile Banking and Cybersecurity

Cybersecurity has become increasingly important in many mobile banking operations. Cybersecurity encompasses a wide range of measures taken to keep electronic information private and avoid damage or theft. It is also used to make data is not misused, extending from personal information to complex government systems.

Three main types of cyber attacks can occur. These are:

  • Backdoor attacks, in which thieves exploit alternate methods of accessing a system that don't require the usual means of authentication. Some systems have backdoors by design; others result from error.

  • Denial-of-service attacks prevent the rightful user from accessing the system. For example, thieves might enter a wrong password enough times that the account is locked.

  • Direct-access attack includes bugs and viruses, which gain access to a system and copy its information and/or modify it.

Steps financial advisors can take to protect their clients against cyber attacks include:

  • Helping educate clients about the importance of strong, unique passwords (i.e. not reusing the same one for every password-protected site), along with how a password manager like Valt or LastPass can add an extra layer of security.

  • Never accessing client data from a public location -- and being sure the connection is always private and secure.

Mobile Banking and Remittances

Remittances are funds that an expatriate sends to his or her country of origin via wire, mail, or mobile banking (online transfer). These peer-to-peer transfers of funds across borders have enormous economic significance for many of the countries that receive them – so much so that the World Bank and the Gates Foundation have set up complex tracking mechanisms. They estimate that remittances to developing countries amounted to $429 billion in 2016, down 2.4 percent from the $440 billion recorded in 2015.

RELATED TERMS
  1. Cybersecurity

    Cybersecurity refers to the measures taken to keep electronic ...
  2. Remittance

    A remittance is the funds an expatriate sends to his or her country ...
  3. Direct Deposit

    Direct deposit is the deposit of electronic funds directly into ...
  4. Geographical Labor Mobility

    This refers to the level of freedom that workers have to relocate ...
  5. Enterprise Mobility Management ...

    Enterprise Mobility Management (EMM) is the organization and ...
  6. Foreign Remittance

    A foreign remittance is a transfer of money from a foreign worker ...
Related Articles
  1. Insights

    How Tech Companies are Disrupting the Remittance Market

    Mobile apps by many financial tech firms are increasingly gaining high revenues from international remittances.
  2. Personal Finance

    How Cyber Security Risks Impact Your Bank

    Here's how cyber security risks mean for the financial industry and consumers.
  3. Tech

    China Mobile: Just How Big is It? (CHL, CHU, CHA)

    The story behind China Mobile, the biggest company you might never have heard of.
  4. Small Business

    Mobile Ad Competitors: Facebook Vs. Google

    Facebook and Google are locked in a heated battle in the mobile advertising sweepstakes. Who will win?
  5. Insights

    How Online Banking Is Overtaking Traditional Banking

    Is traditional banking doomed to be surpassed by online banking?
  6. Insights

    Mobile Money: Using Your Cell Phone To Transfer Funds

    Are you up to date on how easy it is to move your money around with your cell phone?
  7. Personal Finance

    How Cell Phones Have Changed Your Budget

    The cost of owning a cell phone wasn't a factor for people less than two decades ago. Today, there seems to be no end to the additional charges that come from owning a smartphone.
  8. Tech

    5 Money Transfer Technologies And Their Risks

    New technology makes cash swaps simple, but are the risks worth the convenience?
  9. Tech

    7 Cybersecurity Tips for Advisors

    The digital age has created a new breed of thief who can break into client files at any time, but there are ways to minimize risk exposure.
  10. Tech

    9 Ways to Protect Your Cell Phone From Identity Theft

    Thanks to lax phone security and sophisticated hackers, cell phones are the target for identity theft.
RELATED FAQS
  1. 3 Tips to Refinance a Mobile Home Loan

    Refinancing a mobile home loan is possible if the borrower meets certain criteria. Here are a handful of useful tips on refinancing ... Read Answer >>
  2. What economic indicators are important to consider when investing in the banking ...

    Find out which economic indicators are most useful for investors in the banking sector, especially those influenced by central ... Read Answer >>
  3. What is the banking sector?

    Learn why the banking sector is a vital industry to our economy, what it does to drive the economic growth and understand ... Read Answer >>
Hot Definitions
  1. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  2. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  3. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  4. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  5. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  6. Cost of Debt

    Cost of debt is the effective rate that a company pays on its current debt as part of its capital structure.
Trading Center