Most Banking Customers Use an App Despite Security Concerns
If “go to the bank” isn’t on your list of errands these days, you’re not alone: A new NerdWallet survey finds that close to three-quarters of banking customers (72%) use a mobile banking app, and 41% use more than one.
The survey of more than 2,000 U.S. adults — among whom 1,467 are mobile banking app users — conducted online by The Harris Poll on behalf of NerdWallet asked banking customers about their app usage and any concerns app users have about mobile banking. We also asked banking customers who don’t use apps why they opt out.
Mobile banking apps make physical branches obsolete for many app users: More than 3 in 5 mobile banking app users (62%) say they conduct most of their regular banking activities via a mobile app, and 41% say they don’t typically need to use a physical bank branch for banking activities.
Some banking customers don’t think mobile banking apps are necessary for them: Close to half of banking customers who don’t use mobile banking apps (47%) don’t feel the need to use them, though this could mean they’re missing out on useful app features, like live customer service and mobile check deposits.
Security is a concern for many banking customers, whether they use mobile apps or not: More than 2 in 5 banking customers who don’t use mobile banking apps (42%) say it is because they don’t trust the security of these apps. Similarly, nearly half of mobile banking app users (46%) are concerned about their accounts getting hacked.
“Compared to branch visits, banks’ mobile apps typically have far more advantages for consumers making everyday transactions: 24/7 account access, no wait times and no need to spend money on gas or transit,” says Spencer Tierney, banking expert at NerdWallet. “But the risk of a bank data breach or other cyberattack remains a valid concern.”
Many banking app users rely on them daily
About three-quarters of mobile banking app users (73%) report that their bank’s mobile app is user-friendly, and 62% conduct most of their regular banking activities via a mobile app, according to the survey. And about 2 in 5 mobile banking app users (41%) say they don’t typically need to conduct their banking activities at a physical bank branch.
Over the past few years, avoiding in-person banking may have been a priority for many because of the COVID-19 pandemic. The survey found that one-third of mobile banking app users (33%) use their mobile banking app more now than they did before the pandemic. But not all banking customers are app users — even now.
Non-app users cite lack of need, security concerns
Not all banking customers use their bank’s mobile app. The No. 1 reason is lack of necessity: According to the survey, close to half of banking customers who don’t use mobile banking apps (47%) don’t feel the need to use them. This could mean they go to a physical bank branch, but it could also mean they use their bank’s website to conduct banking activities.
Security is another major concern for non-app users. According to the survey, more than 2 in 5 banking customers who don’t use mobile apps (42%) say it’s because they don’t trust the security of the apps. And they aren’t alone; mobile banking app users also have some concerns related to security.
App users have concerns about mobile banking, too
The survey found that three-quarters of mobile banking app users (74%) have concerns about mobile banking. The two most pressing concerns are accounts getting hacked (46%) and someone accessing their bank account if their phone is lost or stolen (38%).
A third of mobile banking app users are concerned about getting locked out of their accounts (33%). Some are worried about someone they live with getting in; the survey found nearly 1 in 10 mobile banking app users (9%) are concerned about their spouse or child accessing their account on their phone.
What banking customers can do
Consider switching to an online-only bank. With many banking customers not feeling the need to use physical branches, it may be advantageous to switch to an online-only bank. Because of the lack of branches, online banks tend to have lower overhead costs and offer higher interest rates than traditional brick-and-mortar banks. As interest rates rise, the difference in rates can be stark.
“The difference between traditional and online banks’ rates has always been clear, but right now it’s jaw-dropping,” Tierney says. “We’re talking about savings accounts with 2% to 3% annual percentage yields and no monthly fees. Earning more interest from these online accounts may help soften some of the blow that high inflation is having on our wallets.”
The national average savings account interest rate as of October 2022 is just 0.21%, according to the Federal Deposit Insurance Corp. On a savings balance of $10,000, that’s $21 per year in interest, compared with more than $300 per year if you choose a bank with a 3% APY.
According to the survey, nearly a quarter of mobile banking app users (23%) have communicated with a live customer service agent through their bank’s mobile app. This is an especially useful service for people averse to phone calls.
“Bank apps also usually have text and email alerts you can customize and set up,” Tierney says. “So you can get pinged for transactions you don’t recognize and act on potential fraud quickly.”
Take steps to use mobile banking apps securely. App users and non-app users alike have security concerns about mobile banking apps, but there are ways to bank safely and securely. Make sure you keep your app updated, use a strong password and avoid using mobile banking apps while on unsecured public Wi-Fi.
“As with other internet activities, managing your finances on a mobile app can be quick and easy, but do your due diligence to keep sensitive information off social media and other public channels,” Tierney says.
This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Sept. 29 to Oct. 3, 2022, among 2,066 U.S. adults 18 and older, among whom 1,467 use mobile banking apps. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.8 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Chloe Wallach at [email protected].
NerdWallet disclaims, expressly and impliedly, all warranties of any kind, including those of merchantability and fitness for a particular purpose or whether the article’s information is accurate, reliable or free of errors. Use or reliance on this information is at your own risk, and its completeness and accuracy are not guaranteed. The contents in this article should not be relied upon or associated with the future performance of NerdWallet or any of its affiliates or subsidiaries. Statements that are not historical facts are forward-looking statements that involve risks and uncertainties as indicated by words such as “believes,” “expects,” “estimates,” “may,” “will,” “should” or “anticipates” or similar expressions. These forward-looking statements may materially differ from NerdWallet’s presentation of information to analysts and its actual operational and financial results.
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