It seems that mobile technology is constantly on the rise, with now 4 out of 10 U.K. residents regularly using mobile banking apps, in contrast to traditional banking. Due to our current financial market, there are also more and more people struggling to keep track of their finances, and an abundance of money-saving and budgeting apps to compensate.
Despite their purpose to make our financial lives easier, banks have repeatedly warned customers to be cautious of these apps, particularly in regard to their security, and when providing personal information.
In light of their recent controversy, it is important to assess whether or not the majority of them are secure, and if you can trust them with your sensitive information.
How safe are they really? And what do you risk if your personal data becomes unprotected? Let’s take a look at their security threats and find out if these apps are safe enough to use.
• Monitors your expenses
Budgeting apps are supposed to help you monitor your spending, so you can observe your negative spending habits and improve them accordingly.
They collect data about your finances, sourced from your bank accounts, to give you an indication of what exactly is going in and out, such as loan payments.
• Improved security
Apps are becoming increasingly more protected and secure. The majority of money-saving apps encrypt your data and use the same means of security as banks do.
So, the risks you take with money saving apps and the bank are nearly identical.
• FCA recommended
The FCA encourage the use of personal finance apps.
What Risks Do They Pose?
In reference to a survey carried out by Accenture in 2017, 85% of U.K. consumers are hesitant to share their bank details with third party providers due to the probability of online fraud.
Is this warranted?
Well, to use a money-saving app, you are usually required to log in with your bank details. Upon logging in, the app uses your details to access your account – a process recognised as ‘screen-scraping.’
Screen-scraping can be a huge problem if the money-saving app you are using is deceptive. It could not only render you accountable if your money gets stolen, but you may also violate your banks security regulations. Fundamentally, sharing your login information can also leave you vulnerable to deceptive technology, posing as genuine and legal organisations to access your sensitive data.
Regardless of the fact, the FCA have overruled bank statements which proclaim that they will not cover the damage if one fell victim to fraud using a money-saving app. The FCA expressed that banks cannot simply pardon their responsibilities, and in their own words stated:
“Your banking terms and conditions should not prevent you from sharing your credentials with regulated AIS or PIS providers. Your bank cannot hold you responsible for unauthorised transactions just because you have shared your credentials with regulated AIS and PIS providers.”
What Can You Do To Increase Your Security?
1. Check that they are FCA-approved
Before downloading a money-saving app on your phone, you should always check that they are FCA-approved first through the Financial Services Register. The FCA regulates companies that provide financial services to consumers, such as loans, so the go-ahead from them means that they should be safe to use.
2. Avoid using your bank details
Money saving apps sometimes require that you link your app account to your current bank account. However, banks warn their customers that this can be dangerous. By giving the app access to your sensitive information, you are, in effect, consenting outsiders full access.
3. Do not give the app access to other information
After you download any app, it tends to ask whether you give permission for it to access other apps or data that are on your phone. Some money-saving apps may take advantage of this and access the information that allows them to hack you.
So, make sure you think carefully about what you are giving the app access to before you do.
So, Are They Safe?
In the age of technological advancements, we face risks online every single day. It is our responsibility to take the necessary measures to reduce that risk as much as possible. By protecting your information, and following security tips, money-saving apps are a great tool to use. The benefits outweigh the risks, and you can benefit from learning a money-saving trick or two!
Seeing as you are already in the mode of money-saving, why not find out The Best Ways To Save Money In The Run Up To Christmas next?