The State of Online Banking and Security in 2019

The introduction of the internet, advancement of digital technology, and the creation of mobile devices have made enormous changes over the past two decades. The rise of online banking has been one of the major developments which have allowed people to interact with their bank without stepping foot in the door.

This means that how customers interact with their bank has changed forever, making it one that has gone from having to visit during business hours to access their accounts any time of the day or night. Today, people can pay bills, check their balance, shift money between accounts and more all with a few clicks on their browser.

Since banks began to take their services online before the turn of the 21st century, the change in the habits of Americans in terms of their banking has been pronounced. What follows are three of the major areas where online banking has made significant progress in 2018. Which changing times come changing approaches which banks around the world have responded. This was highlighted by an event which caused considerable changes and pushed online banking to where it is today, the 2008 financial crisis.

2008 Financial Crisis

One of the prime motivating factors for the rise in mobile banking was the 2008 financial crisis that threatened the very existence of many large banking institutions. Although the crisis was averted fairly quickly, the result was that the federal government passed new rules and regulations which changed how lending institutions worked.

The result was that larger banks such as Citibank, Bank of America, JPMorgan Chase, and Wells Fargo could not merge because of the “too big to fail” fear which was incorporated into the new laws. So, the larger banks instead turned towards investing in mobile banking platforms to provide greater convenience and grow their customer base.

Although it appears that at least some of the rules and regulations from the passage of the Dodd-Frank bill which created this financial environment may be changed, the emphasis on mobile banking platforms still has a powerful impact today. The three major areas of advancement are mobile usage, security, and technology. How customers view their banking experience takes all three areas into account.

Mobile Usage

The use of mobile devices such as smartphones and tablets has grown rapidly to the point where today they are far more prevalent in surfing the web than desktops and laptops. The mobile usage revolution has had a profound impact on online banking as more banks cater their services to those who use smartphones and tablets.

According to recent surveys, the average mobile user spends about seven days per month accessing their bank through mobile devices. The average is even higher for Millennials which reaches up to ten days per month. The convenience of mobile devices allows for accessing online banking at home, during work breaks, or even when socializing with friends.

The mobile usage has led to a greater awareness of personal financial standing for those who frequently access their bank online compared to those who may occasionally use their devices or computers to go over their financial information. The same survey shows mobile banking users are 65% highly confident about the exact balance they carry, a full 12% higher compared to those who do not use online banking.

For banks, the increase in online banking has created greater customer retention with virtually all customers who have mobile apps to their banks sticking to their services. Of course, the retention is augmented by the use of advanced digital technology which fosters greater engagement while being more time efficient.

In 2018, advancements in mobile devices have led to greater speed in downloading online banking sites which means even greater convenience. This has led to even more people using their mobile devices to access their accounts and conduct their business from the convenience of their smartphone or tablet.


One interesting aspect of the evolution in security for banking is how traditional institutions have benefitted considerably. With news reports of hacked accounts in many businesses, traditional banks are seen by 87% of Americans as more trustworthy in terms of security compared to the financial institutions which are not traditional banks.

This may be more perception than reality, but then again one of the selling points for traditional banks is their emphasis on security which has paid off in recent years. This may be due in part to familiarity, but there is little doubt that traditional banks have managed to stay a step ahead of the competition in the field of providing better security for their clients.

With more emphasis on security, it does mean that customers may have to go through additional steps to reach their accounts. In addition, measures such as encryption, more complex passwords, and traditional methods of putting limits on withdrawals in case there is a breach in the system which limits the damage. Of course, many newer banks, especially those that do not have physical establishments or branches but provide all of their services online have embraced the tightest security to demonstrate to potential customers why they should be trusted.


The advances in digital technology have also spurred continued growth in online banking, especially with mobile devices. A recent survey by Citibank revealed that behind social media and weather apps, mobile banking apps were the most popular. This is perhaps not surprising given how many transactions a typical American makes every day. Still, it is the use of apps which has arguably had the biggest impact on online banking since its inception over twenty years ago. It represents just one of the many advances in technology that has helped make banking more convenient for millions of Americans.

One area that has helped mobile banking in terms of technological advances is the desire of many Americans to reduce what they carry in their wallets and pocketbooks. The move towards a cashless society may not be inevitable, but there is little question that more Americans are carrying less in their wallets. This is due in part to the growing comfort in using smartphones and tablets to handle transactions along with traditional debit cards. It’s not surprising that 68% of Americans in a recent survey see their smartphones replacing their wallets in the near future.

Citi has announced an expansion to their customers who use mobile devices for their online banking services. This new era brings in the entire range of banking needs within the fingertips of those who bank at Citi. From the in-app account opening to accessing all aspects of their financial interactions with the bank to insights into spending habits so they can better manage their finances, Citi is just one example of how banks are using additional technology to provide greater convenience.

What’s even more interesting is that those who do not back at Citi can now create profiles and connect to their accounts outside the bank. This movement towards greater convenience even for non-customers has put Citi in a unique position among the major banks. However, it is a position that they might not be alone in for long assuming that other banks see the same advantages.

The Traditional Approach

While online banking in 2018 offers more options than ever, the one advantage that traditional banks with their brick-and-mortar establishments have is the ability of their customers to walk in and speak face-to-face with a representative to answer questions or solve issues. While mobile banking does offer messaging and chats, it does not offer the comfort of speaking to a banking representative directly.

This may be why some consumers set up high-yield savings accounts with online-only banks while keeping their checking account at a traditional local bank. This means for money they use regularly, the knowledge that they can walk in during business hours and have their questions answered is a comfort that mobile banking platforms have yet to reach. However, that day may be soon coming with more people, particularly younger people enjoying the services of mobile banking.

There is little doubt that online banking has changed considerably over the past several years, thanks in large part to so many people using mobile devices over traditional desktops and laptops. It’s an easy prediction to make that mobile devices will play a stronger role in the foreseeable future if only because mobile devices are becoming more popular. Today, they represent the majority of devices used to search the internet which means that digital technology will advance along the lines of smartphones and tablets.

Of all the advances in online banking, the most important has been the added convenience to the consumer. This means that a person spends an average of 45 minutes less per month using mobile banking services compared to the traditional use of banks. This time savings translates into being able to do more things during the day while still getting basic financial needs attended. This means that the future of online banking from 2018 onwards looks bright and even more convenient for consumers around the world.

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