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4 tips to get the best mobile banking experience

Constance Gustke

Mobile banking use is exploding, and banks are quickly adding new services.

Last year, 10 million more people signed up for mobile banking, according to Javelin Strategy and Research in Pleasanton, Calif., driven by soaring smartphone and tablet use. And, one-third of the U.S. population is now tapping into mobile banking, versus one-fifth in 2010.

But mobile services vary widely. Here's the mobile banking landscape you're likely to encounter and how to choose the best bank and apps for you.

Big banks such as JPMorgan Chase and Co., Bank of America and Citi have led the charge, offering the most robust mobile banking technology, says Mary Monahan, Javelin's research director of mobile. And they consistently head the class in mobile banking service quality rankings, though regional banks are also quickly adding mobile services.

Game-changing banking features

Online banks aren't far behind. Ally beefed up its mobile banking offerings last November, adding mobile deposits and bill pay. And CapitalOne 360's mobile banking, formerly ING Direct, allows you to pay bills, deposit checks and transfer funds, and gets high marks from Monahan. Even bank-replacement upstart Simple offers a downloadable app for full-service mobile banking.

Game-changing mobile banking features are coming from new upstarts, though. Prepaid debit card player Green Dot Corp. launched its smartphone-based GoBank this year. "It's the next wave in mobile banking," says Madeline Aufseeser, senior analyst at Aite Group in Boston. "Everything is managed through your smartphone, including opening the account." As for monthly membership fees, customers pay whatever they feel is the right price, ranging from $9 to nothing.

However, even GoBank isn't completely fee-free. If you go outside the bank's free 40,000 ATM network, you'll pay $2.50 per withdrawal and $1 for inquiries.

More companies will soon launch their own versions of GoBank's mobile services, Aufseeser says.

Picking a mobile bank app

With so many changes afoot, here are four tips for narrowing your mobile banking search and utilizing the technology.

For the tech savvy, mobile banking apps can help to save time and stay on top of your account balance. Banks are adding more features fast and furiously, but some are better than others. Mobile bank deposits, where you can snap a picture to deposit checks after downloading a special app, are essential these days, Monahan says. Big banks offer these downloadable check-deposit apps for Apple as well as Android smartphones.

Being able to move money between bank accounts and get account updates are handy features, too, Monahan says. Mobile text alerts can help keep your account safe by notifying you about recent transactions. For example, Chase has a real-time mobile banking text alert that notifies you when your account is about to head into negative territory or when your password has changed.

Ted Bissell, a mobile payments expert at PA Consulting Group in New York, sees mobile bill payments as essential. To use this feature, download your bank's mobile banking payment app. A list of your online banking bill payees then appears on your smartphone, and you can just touch to pay.

Watch out for hidden bank fees that may pop up. Downloadable mobile banking apps are usually free, Monahan says. However, some banks are charging for special services, she says. For example, U.S. Bank charges 50 cents per check when consumers make mobile deposits. Check up on fees before signing up for a new account.

Check out mobile banking app security before use. Some apps are safer than others. Apple vets its apps pretty well, Monahan says. And banks do a good job securing the mobile banking apps available on their websites. However, Android app security can be dicey. So don't be an early adopter, she says, and make sure the app has good user ratings.

Also, Android offers lots of unapproved third-party apps, says Robert Siciliano, an identity theft expert in Boston. These apps should be avoided. "They could have viruses," he says. "Be selective."

To protect yourself, run all banking apps through an antivirus program on your smartphone.

Stick with large banks if you want full-featured mobile banking. Bissell says they are more secure than apps, and they're also the usual way most people access their bank accounts. Plus, they're easy to use.

Mobile banking sites also can adapt to a smartphone or tablet screen size. You merely access the built-in browser on a mobile phone by touching a link. Citi's mobile banking site, like those of many big banks, lets you track payments, check account balances and transfer money between accounts.

Early high-tech adapters of mobile banking might want to opt for big banks, online banks or big credit unions that offer mobile bank accounts and lots of bells and whistles. The reason: More mobile banking innovations are coming. Monahan says that you'll soon be able to snap a picture of a bill and have it automatically paid from your bank account.

Virtual wallets, or encrypted virtual accounts with credit and debit card information and payment capability, are also set to surge in the next few years. They are now being offered by the likes of PNC Bank and Google.

Even personal finance management is getting a tech makeover. GoBank's mobile banking service has a special budget tool called Fortune Teller that determines whether you can afford to buy something. "It will be very attractive to the younger, mobile generation who is learning to manage their finances," Aufseeser says.

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