How to Know if You Can Trust Your Fintech App

Even if you’ve never heard the term “fintech,” it’s likely that you’ve interacted with it in some way. Short for “financial technology,” fintech refers to the application of digital tools (e.g., banking applications, web advisors) to help improve or automate the way we manage our finances. If you have a banking app on your phone, you’re a fintech user. 

As of October 2021, nine out of ten Americans have used fintech apps to help manage their finances. Though most fintech users skew younger, fintech usage among people over 56 years of age continues to double year after year. 

While fintech provides an easier, more convenient way to manage finances remotely through your smartphone or computer, there are still potential risks for users of fintech apps. Below, we’ll take a look at how to stay safe when using different types of fintech services.

Mobile Banking

Mobile banking refers to the use of a mobile device to manage financial transactions. Most banking apps allow you to transfer money between your accounts, check your balance statement, and view transactions in real-time. You can also deposit a check by taking photos of the front and back on your app, pay bills, and even send money to others. 

While using a mobile banking app is generally considered to be safe, there are a few precautions to keep in mind when downloading and using a mobile banking app.

1. Download the app directly from the bank’s website

Downloading a mobile banking app from your bank’s website will keep your phone safe, as bank websites use high-end encryption technology to keep information protected. If you’re uncertain if a bank’s website is legitimate, ask a customer service representative to confirm either in person or over the phone before downloading. Check that the URL is correct before starting your download.

2. Beware of “sideload” apps

If you play games or use tools on your mobile device, make sure you download them from trusted sources. Downloading from non-vendor-approved platforms can increase your risk of adding “sideload apps” to your device, which remain on your phone and can activate when you open a banking app. The sideload app captures your banking username and password, which leaves your account vulnerable to fraudulent activity. 

3. Ensure your banking app is legitimate

Fraudsters excel at creating realistic-looking apps seemingly connected to well-known banks, so it’s of utmost importance to download your banking app from your bank’s website rather than searching for the app online or even within your phone’s app store. Once you enter your bank information into these fraudulent bank apps, it’s easy for hackers to take control of your assets. 

4. Use two-factor authentication

The most secure mobile banking apps require more than just a password or PIN to sign in. For example, a mobile banking app using two-factor authentication may require you to enter a code sent to you via text message. This means that if a hacker attempts to gain access to your username and password, they’ll be unable to log in without having physical access to your phone to receive the message.

5. Try to avoid public WiFi

Conducting financial business on your mobile device via public WiFi increases your risk of exposing personal information. If the network is not secure or becomes compromised, it can make your information susceptible to being hacked.

Mobile Banking Resources

• Key Benefits of Mobile Banking — This article showcases trends and reasons in support of mobile banking in 2022. 
• Mobile Banking and Financial Security — This educational guide breaks down security features provided through mobile banking.
• Mobile banking tips for consumers and banks — This article looks at both sides of mobile banking to provide a comprehensive overview. 
• What is Mobile Banking? — This video gives a visual example of how money is managed on mobile devices.
• Mobile Banking vs. Internet Banking — This video explains the nuances between mobile banking and web-based banking.

Mobile Payments

Similar to mobile banking apps, mobile payment apps allow you to make transactions using your phone rather than entering your credit card or banking information. These fintech apps often link to a credit card or bank account when you first get started, directly drawing funds to make payments. Apple Pay, Google Pay, Venmo, and PayPal are popular mobile payment fintech apps.

When using mobile payment apps, here are a few security measures to consider:

1. Keep your operating system updated

When you input your credit or debit card information onto your mobile device, there are many security factors keeping that information safe (e.g., passcode, fingerprint, face recognition).

Since smartphones are constantly updating their operating systems with new and improved security measures, it’s important to keep your phone updated; this can help to keep your payment information as safe and secure as possible.

2. Pay attention to URLs before making a purchase

Making a mobile purchase on your phone is a popular way to shop; however, it’s important to ensure the site you’re using is secure. One indicator that the site is safe is the HTTPS tag before the web address. Though this is not foolproof, if the HTTPS is missing, it’s best to avoid buying from that entity.

3. Use trusted apps

Before purchasing an app to download, read reviews and do your due diligence to ensure that the app will provide the advertised service. Negative reviews indicate that the app is not functioning the way it claims and is one you should avoid. Conversely, an app with overwhelmingly positive reviews may not be legitimate either — if it seems too good to be true, it probably is. If the app seems off or illegitimate, go with your gut and forgo using it.

Mobile Payment Resources

• What is Mobile Payment Security? — This article analyzes the facets of paying securely through a mobile device.
• Mobile Payment Apps Are Safe and More Secure Than Cash — A guide that looks at the current security landscape of mobile payments. 
• Understanding mobile security standards — A deep look at how mobile payments are kept safe. 
• How do mobile payments work? — This video breaks down how mobile payments get transferred.
• Mobile Payments: The Good, the Bad, and the Confusing — A look at all sides of the mobile payment process. 

Budgeting Apps

Budgeting apps offer financial advice through your mobile device. These apps often require you to sync your bank accounts and credit card information and are a great way to keep an eye on spending, especially when working toward financial goals. However, there are a few safety precautions to keep in mind while using these fintech apps.

Protect your mobile device password 

It’s not advisable to keep your phone unlocked, even if you’re not using fintech apps. Budgeting apps encrypt passwords to keep login information safe and secure — but if your phone gets stolen, thieves might be able to access a wide range of sensitive information through a budgeting app — especially if they can easily open your phone.

Only connect accounts you’re comfortable sharing

The more accounts you connect to your budgeting app, the more comprehensive and specific the financial advice it yields will be. However, if there are certain financial aspects of your life you don’t feel confident sharing, don’t feel pressured to link them. If your goal is to budget, adding retirement or investing account information isn’t as useful as having the app track your credit card spending for the month.

Protect your phone in public

In addition to not using fintech apps when connected to public WiFi, be aware of your surroundings when using your budgeting app. Others around you may be able to see the sensitive data on your screen, which could open doors for those who have ill intentions toward you and your funds.

Budgeting App Resources

• Best Budgeting Apps of 2022 — Forbes’s review of the best budgeting apps and their capabilities.
• How to choose the best budgeting app — A guide to help select the right budgeting app for your needs.
• Are budgeting apps safe to use? — A financial expert’s take on budgeting apps. 
• App vs. Spreadsheet – Which Should You Use for Budgeting? — This video compares more traditional methods of budgeting against using a budgeting app.
• The best free budgeting apps — A video featuring apps that don’t require any fees to use.

Cybersecurity Tips for Fintech Apps

Privacy and security are imperative in keeping your personal information safe on your mobile device — especially when using fintech apps to manage your finances. Almost all fintech apps have access to information that could personally identify you, which is why it’s important to be diligent about your data and protect your dollars. Here are a few important tips to keep in mind when using fintech apps.

1. Don’t skip the terms and conditions

When you download a fintech app, users are usually required to review and accept the terms and conditions that apply to app usage. While these terms and conditions can be long winded and difficult to understand, it’s worth spending some time reading into how the app protects your privacy, which of your information the app will access, and how that information will be stored and shared.

2. Be diligent about password protection

It’s not enough to keep your fintech app password protected. Passwords for fintech apps should not only be unique and difficult to guess, but they should also be changed regularly to make gaining access to your accounts more challenging and protect against potential threats. Whenever possible, enable two-factor authentication for fintech apps and use security measures on your device, such as fingerprint, facial ID, or password login to protect your data.

3. Do your research before downloading a fintech app

Fintech apps make managing finances through a mobile device easy and exciting. However, before downloading a new fintech app, take the time to learn more about it. For example, some fintech apps charge a monthly fee to use — whether it’s a transaction fee for sending money or a fee to access financial advisors on a budgeting app. There are many fintech apps on the market, so shop around before choosing which one you’ll use for mobile payments, budgeting, and banking.

4. Monitor for issues and know how to resolve them

If you do notice anything on your device that raises red flags, address the issue swiftly. Keep customer service information for your fintech apps in an easily accessible place, and be sure to call and report suspicious activity as soon as you notice it.

Cybersecurity Resources

• Why Cybersecurity is Important in the Fintech Industry — A look at the importance of cybersecurity when managing finances from a mobile device.
• Keeping banking and finance safe in 2022 — This article evaluates the current landscape and offers actionable ways to evaluate financial safety while using a fintech app.
• Cyber Security In 7 Minutes — This video offers a foundation on understanding what cybersecurity means and how it impacts you.
• Best Practices to Ensure Cybersecurity — A look at how to utilize cybersecurity to manage your money with fintech apps.
• Banks Admit Cybersecurity Is the Biggest Threat. Now What? — Explains how banks work to protect your financial assets.

Fintech Resources for Each Stage of Your Life

Children

• Fintech For Kids – Generation Alpha and Beyond — An article discussing family-based methods and resources for teaching proper fintech habits. 
• Greenlight — A personal finance app designed for children and teens. 
• Online Privacy for Kids — A child-friendly video providing basic cybersecurity tips. 
• FBI | Safe Online Surfing — This website offers games and interactive resources teaching children how to be safe online. 
• How to teach your kids about cybersecurity — An article for parents looking for effective ways to teach their children about cybersecurity. 
• A Parent’s Guide to Cybersecurity — A guide for parents to follow in keeping their children’s digital identities safe, which can be an asset to their fintech activity. 

Teens

• Talking to Teens About Cybersecurity — An article exploring ways to discuss cybersecurity with teens. 
• Teens Guide to Cybersecurity — A comprehensive guide to important teen cybersecurity tips and best practices. 
• Four Steps to Help Your Kids Build Smart Money Habits — A Forbes article outlining how children and teens can start making better personal finance decisions via modern tech. 
• Teen Voices: Oversharing and Your Digital Footprint — This helpful video gives an overview of how to make better, safer decisions online.
• Acorns Early -— A teen-oriented version of the popular personal finance app Acorns. 

College

• Best Student Banking Accounts — Take advantage of these top mobile banking accounts that cater to college students.
• 12 ways to save money on a college student budget— Mobile-friendly banking tips that help students save money. 
• You’re going to college: Time to start using payment apps — The best payment apps for college students. 
• How to Transfer Money Online to Friends and Family — Pay your friends back safely with these tips. 
• How to Set Your Budget as a College Student — A look at budgeting basics for college students, and how mobile apps can help.

Adults

• Five Tips to Get the Most From Your FinTech — An article discussing how to maximize the performance and efficiency of various fintech. 
• Five Financial Tips for Young Adults — A list of adult-oriented, tech-driven personal finance tips.
• 10 Personal Finance Rules School Doesn’t Teach You — Personal finance and fintech advice for younger adults. 
• What Is FinTech And How Does It Affect How I Bank? — For adults still unfamiliar with fintech, this article provides additional insight as the technology pertains to personal banking. 

Seniors

• Tips to Help Seniors Keep Their Money Safe — A video that informs seniors on how to keep funds protected. 
• 4 Digital Tools That Help the Elderly Manage Their Money — A guide to payment apps for seniors.
  
• Digital Wallets and the Popularity of Mobile Pay — Written for a senior audience, this piece explains why mobile payments have become popular. 
• How Personal Finance Apps Can Help Seniors — Here’s how budgeting apps help seniors manage their budgets. 
• How retirees can avoid cybersecurity threats  — Retirees have become a target for scammers. Here’s what to know to stay safe. 

Bottom Line

Fintech apps are an easy, efficient, and relatively safe way to manage your finances on the go. With the right safety steps and precautions, you can enjoy access to your bank accounts and the ease of mobile payments without having to worry much about potential threats.