Mobile banking has become really popular owing to the convenience that it gives its customers. These apps enable you to access your bank accounts from your phone and conveniently perform a number of actions, such as transfer money between accounts, make payments and check balances using your mobile device. The increasing popularity of applications, the proliferation of smartphones and greater familiarity with text messaging are driving the use of banking services on mobile phones.
What do they do?
Account Balance The applications let you check your balance and make sure that you do not incur any overdraft fees.
Recent Transactions View your recent transactions to see if that check you deposited yesterday has been credited to your account or if last night's dinner has been charged to your account yet.
Transfer Funds Allows you to move money between your accounts. If you're afraid you will overdraft today, you can move money from your savings account to avoid an overdraft. Some institutions allow you to transfer funds from an account at a different institution, but you must set this up in advance.
Deposit Checks This is a relatively new feature that enables you to make a check deposit by taking a picture of the check with your smart-phone.
Pay Bills Some institutions allow you to pay bills from your phone. Most of the time, you must specify the biller in online banking beforehand, but if you've made an online bill pay to the business before, this isn't much of an inconvenience.
Receive Alerts You will receive an alert when your balance drops below a certain amount or when that bill pay has been processed. Like email alerts, mobile banking alerts keep you up to date with what's going on with your accounts.
Locate ATMs A search tool much like what's offered on you bank or credit union's website can help you find the closest ATM when you're out and about.
How do they work?
SMS Messaging Text messaging and alert is one of the simplest ways to let the user access the account information or transfer funds. Every time the payment has been made or it is due, the bank may also notify you with an SMS.
Mobile web This is the second mobile banking option. It is similar to an online account access from a home-based computer, this allows for checking balances, bill payment and account transfers simply by logging into the user's account via a mobile web browser. This means that any of the online banking that you do from your computer can also be done from your mobile device from anywhere and anytime.
Mobile banking applications for Android, iPhone and Blackberry connect the user directly to the bank server for complete banking functionality without having to navigate a mobile web browser. These include apps developed and offered by banks themselves as well as third party apps (iTune store). They allow you to do various banking, budgeting, transfer of funds, etc. all using your mobile phone.
Why do they matter?
From a customer's perspective, being able to manage their money on the go has high convenience and comfort value. Also, in staying informed is the first step towards managing and improving.
For banks, mobilizing their services gets them higher customer satisfaction. It also offers them with a great opportunity to try and interest customers into additional services and promotions through alerts and ads. The biggest benefit for benefit for the banks though, is the fact that they can save a lot of money by closing small branches and having the customers interact either through mobile or through the ATMs.