BENEFITS AND LIMITATIONS: Mobile Banking

Advantages 

On these days we do our daily stuff with the help of our mobile phones, that also includes banking. Mobile banking is a free, convenient way to keep up with your finances.

Some of the advantages of using mobile banking are the following:

AVAILABILITY

There are no working hours or operations or particular requirements for mobile banking, customers can check their account, move money, pay bills and various other banking processes with the help of mobile banking. It is available 24*7 for the customers.

PAPERLESS

No one enjoys getting bank statements in the mail. With the help of mobile banking, there is no need for the customer to receive junk mail from the bank. It’s also safer because you are no longer having to get away from sensitive information into the trash.

CONTROL

Mobile banking makes it so easy to have complete control over your finances. You can monitor your balances and move money between accounts to avoid overdraft fees. With bill pay you can alert when it’s time to pay to avoid late fees, or set up recurring bill payments and not have to think about it.

SAFE

Mobile banking is safer and secure. All reputable banks and financial institutions use encryption to safeguard and protect your privacy and identity information on mobile apps.

TIME SAVING

It is time saving because we don’t want to visit the particular bank to do our banking process. We can do it with the help of mobile banking.

HELPS YOU TO TRACK YOUR FINANCES

Managing an account through your mobile also puts you in charge of your money and helps you better to know your financial standing. You can always monitor your account balance and transfer money from a different account if needed be. You can check your balance and statement at any time.

MINIMIZE ERRORS

A comprehensive mobile banking will reduce errors that users make. There hasn’t been a better time to get familiar with mobile banking as indeed, this is the only way forward. 

DISADVANTAGES

OPERATING EXPENSES

It tends to be high in traditional banking, since in addition to having administrative offices, they also have offices to serve their clients in person. Among its main operating expenses are: 

  • Paying rents from the premises where they operate
  • Payment of public services and security
  • Expenses in stationary and issuance of the plastics (for making debit and credit cards)

MOVE TO OFFICES AT CERTAIN TIMES

In case of making a transfer or other type of management, in many cases physical presence must be made in the bank’s office and within the business hours established by the bank, which is considered as a great disadvantage. 

SLOW PROCESSES

Another disadvantage is the slowest process held in the organization. Another demonstration of the slow process time that transactions between different banks usually take.

HIGH COMMISSIONS

In general, traditional banking commissions are high due to higher operating expenses, which makes many of their products or services more expensive compared to other products or fintech companies.

LOW STIMULUS TO SAVINGS

Due to lower interest rates that traditional banks usually pay their savings to the clients if there is a low saving stimulus. This is because traditional banking promotes more bank loans and they are the ones that generate more interest and collection fees, which allows them to create more fiat money and have more profits.

LIMITATION IN ONLINE BANKING

Although traditional banking is using some functions of online banking, the latter is still limited. For example, in many cases this service is conditioned to the use of some of its product. There is also the problem of limits on amount to be transferred in addition to difficulties or restriction in transferring money to other countrie

CONCLUSION

As smartphones become more commonly used, and their capabilities expand, they may increasingly be the means consumers use to access financial services and manage their finances. Their constant presence also makes them a potentially useful tool for the delivery of just in time financial information or as in decision making. 

Given the prevalence of mobile phones, particularly smartphones among minorities, low-income individuals, and younger generations, mobile technology has the potential to empower consumers and expand access to financial services for underserved populations.

The use of mobile banking has increased by more than a third in the past year, and it appears likely to continue to increase as more and more consumers use smartphones. While still small, the use of mobile phones to make payments at the point of sale has increased even more rapidly. Over a quarter of mobile phone users express some interest in using their phones to make payments at the point of sale, giving mobile payments substantial growth potential as the ability to make these payments becomes more widespread.

The two factors limiting consumer adoption of mobile banking and payments are concerns about the security of the technology and a sense that they don’t offer any real benefits to the user over existing methods for banking or making payments. With regards to security, consumers have actually become more likely in the past year to report that they simply don’t know how safe it is to use mobile banking, suggesting that consumers need to be provided with reliable and accurate information on the level of security associated with the various means of accessing mobile banking. In terms of the value proposition to consumers, the significant number of mobile users who reported an interest in using their phones to receive discounts, coupons, and promotions or to track rewards and loyalty points suggests that tying these services to a mobile payment service would increase the attractiveness of mobile phones as a means of payment.