• Wed. Aug 3rd, 2022

Mobile banking Vs. Traditional banking: which is the best solution?

  • Mobile banking lets you experience banking through a mobile app.
  • Traditional banking services require you to visit a branch during business hours.
  • Mobile banking can be used anywhere, but traditional banking can provide better customer service.
  • Read more stories from Personal Finance Insider.

Mobile banking has recently grown in popularity and usage over the past year. Has it become better than traditional banking? We’ll compare the two forms of banking so you can decide if one form of banking suits your needs more or if you prefer a combination of the two.

Mobile banking and traditional banking: at a glance

Mobile banking and traditional banking provide access to banking services in different ways.

  • Mobile banking is a form of banking where you will have access to products and services primarily through a mobile application.
  • Traditional bank is a form of banking where you will visit a local branch to access banking products.

What is mobile banking?

Mobile banking is done through a mobile application. If you are part of an online banking platform or an online-only institution, you will primarily access banking products and services through a mobile app or website. However, physical banks can also have banking apps.

The main advantage

mobile banking

One thing about traditional banking is that you can access your bank account anywhere if you have a smartphone. You don’t go to a branch to check your bank account balance, transfer money or deposit checks. Mobile banking lets you do this from the comfort of your own home.

Let’s say you need to deposit your last paycheck. You don’t have to worry about bank opening hours or how long a bank line lasts if you can do it through mobile banking. All you have to do is log into mobile banking and use the check deposit feature to deposit your check.

What is Traditional Banking?

Traditional banking is the typical brick-and-mortar bank experience that many are likely familiar with. You will visit a local branch near you and line up for a bank teller or schedule an appointment to handle your banking.

Traditional banking offers a wider range of services than mobile banking. You will also be able to build a stronger banking relationship with a bank if you visit a branch frequently, as you will have the opportunity to speak with a banker one-on-one.

Continuing with the previous example, suppose you need to deposit several checks: a money order, a check from a family member in another country, and your salary. Your bank probably won’t allow you to deposit all of these checks via mobile check deposit, but a local branch won’t have the same restrictions.

With traditional banking, you will go to your bank and get in line with the bank teller. In the meantime, you will endorse your checks and take out your identity document and your bank details. You will go to the bank teller, tell them what transactions you would like to make, and they will help you.

Accessibility Limitations in Mobile Banking

Underrepresented groups often face significant barriers to obtaining bank accounts and services. Although mobile banking services are increasingly used and have no physical limitations, they are still not easily accessible to everyone.

According to a 2019 FDIC study, only 29.8% of households with a working-age person with a disability accessed their bank account primarily through mobile banking. In comparison, 42.9% of households without a disabled person of working age used mobile banking as their primary method of accessing their bank account.

“Sometimes within the disability community, technology adoption is often heavily influenced by socioeconomic status,” says Thomas Foley, executive director of the National Disability Institute. “In 2022, the federal SSI (Supplemental Security Income) is $841 per month. If you think about the price of a new smartphone, you can see that there is an economic barrier to entry that is particularly pronounced in the community of people with disabilities.”

Foley adds that because of these economic considerations, many people with disabilities may be late adopters of technological change, and those living in rural areas face even greater barriers to


and mobile access.

“Many banks have put a lot of time and effort into and are strongly committed to digital accessibility. Their apps are really solid. But at the same time, occasional accessibility issues still arise,” says Foley.

Foley points out that for someone without home broadband access, it can be more difficult to overcome a mobile banking accessibility issue.

Pablo DeFilippi, executive vice president of the Inclusiv Network, says mobile banking may also be less accessible for immigrants who don’t have U.S. IDs and unbanked households.

If you apply for an online bank account, you cannot use a foreign identity card or Consular Matricula. Some online banking platforms will also ask you to link your current bank account when opening it.

“The fact that you need to open an account means that you first need to find a financial institution that is willing to open the account,” DeFilippi explains.

Mobile banking vs. traditional banking: which is better?

Most national banks and

credit unions

provide traditional and mobile banking, so you won’t necessarily have to choose between mobile banking and traditional banking.

However, you’ll need to weigh the options if you want to do business with a small, local financial institution that doesn’t have a mobile app or an online banking platform that doesn’t have a physical location.

Patrina Dixon, CFEI, owner of P. Dixon Consulting, LLC, says mobile banking could be a good option for opening a savings account or storing an emergency fund.

“I always tell people to pay themselves first. Do it by having money automatically deposited into an online account. I say deposit it and forget it,” Dixon says.

If you need bilingual services, Dixon recommends using a traditional bank. Some online banking platforms only offer customer service via live chat or email.