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Are Banking Apps Safe? How to Keep Your Data Secure

A bank app may be safer than your bank’s website -- but you’ll still need to take security precautions.

Oscar Wong / Getty Images

Banking apps make it easy to handle services like depositing a check, transferring money and checking your balance -- all without visiting a physical branch. It makes banking simple and convenient. But are banking apps a safe way to manage your money? 

With data breaches popping up in the news, banking online has its risks. If your information is compromised, cybercriminals could get ahold of your personal and financial account details, which can be time-consuming and costly to mitigate. And hackers are creating new banking scams every day. 

But there are some steps you can take to protect yourself and your bank account information when using banking apps. Here’s how to know if your banking app is safe and the extra security measures to take to protect yourself from scammers. 

Are banking apps safe?

Using an app to handle everyday banking is almost like having a physical branch at your fingertips 24/7. But not all banking apps have the same security features.

Many banking apps with sensitive personal data include multifactor authentication to verify yourself and end-to-end encryption to protect your transactions against scammers. If your bank doesn’t have these or other measures, you may consider safer banking options -- like opening an account at a different bank with more secure internet protocols, or just sticking to your nearby physical branch.

While security measures can help keep your money and information safer, there are also steps you can take to protect yourself when banking online, like creating a strong password and changing it every few months. You should also always make sure the banking app you use is updated, so ensure you’re using its latest security updates. 

How hackers can access your banking information

There are a few methods bad actors may implement to try to secure your personal or financial information.

  • App-based banking trojans:  Once downloaded, these malicious programs can gain access to your banking and financial information. And they can be tricky to spot. Cybercriminals may send you a text or email that looks legitimate, along with a link. We recommend not clicking links from any senders you’re unfamiliar with. If you can’t tell if a notification is legitimate, contact your bank about the notification to find out.
  • Fake banking apps: Scammers also create fake apps that look just like your bank’s actual mobile app to trick you into downloading it and entering your bank login information. Once you enter your banking information, scammers will have access to it. We recommend only downloading a banking app from your bank’s website to ensure you’re using the correct one.
  • Phishing websites and messages: Scammers may also send you a text or email prompting you to click a link and enter your credit card or banking information. In these messages, scammers may pretend to be your bank or someone you know requesting payment for an unpaid bill. 

How to protect yourself when using a banking app

Before downloading a banking app and setting up an account, make sure it’s legitimate by verifying it through your bank’s website. Then, check to see if the app has any of the security measures below to help protect your data against scammers. If these or other features aren’t available, it might be safer to bank on your desktop or to opt for a bank with a safer app. You can also ask your bank about available security features and how to enable them before downloading a mobile app.

Two-factor authentication: This security measure helps prevent hackers from accessing your account -- even if they gain your username and password. With two-factor authentication, you’ll log in with your credentials, then receive a passcode by text or email to verify that it’s you. Since the code is only being sent to your phone or email address, the idea is that scammers will be less likely to access your account.

Behavior tracking: Some banks implement behavioral tracking to understand your patterns when using the app to secure your account and mitigate fraud. If unusual activity is detected, like larger-than-normal money transfers, the app will put fraud prevention measures in place -- such as logging you out or asking you to update your contact information.

End-to-end encryption: When a bank’s app has end-to-end encryption, everything is coded and cannot be translated for anyone, including your cellphone provider. Instead, only you and your bank have access to your data.  Without the right code or keys to unlock the encryption, a hacker is less likely to be able to get into your account. 

Push notifications: Email, text and push notifications are another way to stay informed about your account activity. Some banks can alert you when there’s a login to your account from a different device or location. They may also contact you when a deposit, withdrawal or transaction is made. Getting automatic alerts sent to your phone, even when you’re not banking, can help you detect suspicious activity and take action sooner.

Pros and cons of banking apps

Pros

  • Access to your accounts and banking services 24/7 from anywhere

  • Easier to pay bills and send money to friends and family

  • Ability to lock your card and report fraudulent transactions

  • Get customized alerts about deposits, transactions and other matters

  • Two-factor authentication to secure personal data

Cons

  • Risk of downloading malware or fake banking apps

  • Risks of fraud or identity theft

  • May have limited customer service support

The bottom line

Your phone contains some of your most valuable information -- and if you use a banking app, losing your phone puts your money at risk. If your phone is lost or stolen, be sure to report it to the authorities, take steps to lock it, and change your passwords as soon as possible.

The best way to stay safe when using a banking app is to be vigilant. Beware of new and common banking scams on the horizon -- such as fake banking apps and spam links that download malware. Be sure to change your password frequently and opt for apps that offer two-factor authentication and encryption options. You can learn more about what malicious attacks to watch out for from USA.gov and the Office of the Comptroller of Currency

Dashia is a staff writer for CNET Money who covers all angles of personal finance, including credit cards and banking. From reviews to news coverage, she aims to help readers make more informed decisions about their money. Dashia was previously a staff writer at NextAdvisor, where she covered credit cards, taxes, banking B2B payments. She has also written about safety, home automation, technology and fintech.