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.

mobile banking safety tips

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

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

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.

3 ways to use budgeting apps safely, as written in the article

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

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

Fintech Resources for Each Stage of Your Life

Children


Teens


College


Adults


Seniors


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. 

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