Mobile banking is hot — and getting hotter.
Last year, 74,000 consumers a day began using mobile banking services such as paying bills and making balance inquiries and transfers, according to Javelin Strategy & Research.
In the next five years, Javelin said, the stream of customers switching "to financial institutions with superior mobile services will soon become a river."
At its core, mobile banking refers to systems that allow customers of a financial institution to conduct a number of transactions through a mobile device such as a smartphone.
But not all mobile banking services are the same. "What consumers should shop for is a relationship that's relevant to them," said Chris Gaginis, at the Consumer Bankers Association.
Here are services you should look for in mobile banking:
STRONG SECURITY: "Your bank should be telling you about their security," said Mary Monahan, Javelin research director. "That is the No. 1 reason why people aren't using mobile banking — because they're worried about the security." Make sure that the system logs you off if you're not engaged in any mobile banking activity. "You don't want to leave that thing open forever," Monahan said. "That would be a definite, big, big red flag if you're not being logged off. That tells you that that security is very, very lax." Also make sure your banking app allows you to block the information on your bank card if it's lost or stolen, recommends MyBankTracker.com, a banking information website.
REMOTE DEPOSIT: This feature enables you to deposit your check with your cellphone by taking a picture and sending it to your bank. "That's probably the most popular app that comes with mobile banking," Monahan said. "A lot of people have checks just hanging around in their pocketbooks and they don't want to take a trip to the bank. Now they don't have to anymore."
P2P PAYMENTS: Peer-to-peer payments, or person-to-person payments, allow you to pay someone without cash or a check. For example, electronic P2P payments let you cover your share of a restaurant tab, reimburse a friend for tickets to a movie, or pay your babysitter, housekeeper and other individuals, usually with just a few taps on your smartphone. "If I want to pay allowance to my son and we're all on the same network, I can simply make that transaction through my phone and transfer that money within the bank accounts," Gaginis said. You can also deliver payments electronically to another person's account by transferring money from a prepaid account, a debit card or a credit card using a third-party processor such as PayPal or Amazon WebPay.
OTHER FEATURES: Another key feature is the ability to pay bills using mobile banking. You also want to be able to check your bank balances, and you probably want account alerts. You also want to know when transactions or ATM withdrawals exceed your preset limits.