You may think online and mobile banking are synonymous, but there are distinct differences between the two. Online banking is accessed through a computer's web browser, while mobile banking is done through an app on a smartphone or tablet. Both offer robust banking services, but mobile banking is optimized for on-the-go transactions with features like remote check deposits and real-time alerts.
Nowadays, mobile banking isn't solely offered by traditional banks and online banks. It's expanded to credit unions, insurance companies and fintech firms that offer mobile banking to their customers to manage their finances.
Continue reading to learn more about each of their features, advantages, disadvantages and differences to help choose which one is right for you.
What Is Online Banking?
Online banking allows you to make financial transactions on a device using the internet, and without downloading an app. Some people refer to it as internet banking or web banking. It allows you to conduct banking transactions in the comfort of your home, office or even the local coffee shop.
There are many things you can do with online banking, such as viewing your account balances, opening new accounts, downloading statements or applying for loans and credit cards. As such, it provides detailed information about your bank accounts.
Pros and cons of online banking
Here are the advantages and disadvantages of online banking:
| Pros |
Cons |
| You don't need to download an app. |
The quality of online banking may vary by provider. |
| Self-serve tools can help you avoid long lines at a physical branch. |
Network outages may occur if you have unreliable internet. |
| Filling out forms electronically can be more efficient than physical paperwork. |
You can't deposit physical checks. |
| Setting up automated transactions is easier than at a branch. |
There's a lack of human interaction and personalized service. |
| It gives you control of your accounts (e.g., sending and receiving payments). |
Hackers may attempt to gain access to your accounts. |
Rest assured, online banks are taking various security measures to prevent fraudulent activity.1 Synchrony Bank proactively protects its clients from fraud by using secure technology and encrypting all information to ensure privacy and security. If you're looking to get started with online banking, Synchrony Bank may be the solution for you.
What Is Mobile Banking?
Mobile banking involves using smartphones or tablets to carry out banking activities such as checking balances, transferring money and paying bills on the go. It's different from online banking, which is done on computers, because mobile banking is specifically designed for smaller screens and offers greater convenience for users who prefer to bank using their smartphones.
The main features of mobile banking are that it can be used to pay bills, transfer money within your accounts and to other people, search for ATM locations, contact customer service and deposit checks without a computer.
Pros and cons of mobile banking
Here are the advantages and disadvantages of mobile banking:
| Pros |
Cons |
| Manage your finances while on the go. |
Technical issues or glitches may disrupt your transactions. |
| You have access to all your banking services in one place. |
There's a risk of the mobile app being hacked and leading to identity theft (if you don't enable recommended security features such as two-factor authentication and Face ID).2 |
| You get 24/7 convenience to bank from anywhere, anytime. |
Some banks charge fees. (Synchrony Bank won't charge you extra for using their mobile app.) |
| It's less time-consuming than visiting a branch or calling your bank. |
Not all banking apps provide the same services. |
Similarities Between Online and Mobile Banking
Naturally, there are shared features between online and mobile banking. For example, both options can send you notifications if your account balance dips below a certain threshold, you go into overdraft or there's any suspicious activity.
What's more, you can set up automated bill payments on either platform, which can help you avoid late fees or other financial issues.1 Keep in mind that not all mobile banking apps are the same, so be sure to verify which services you need so you can find one that's right for you.
Key Differences Between Online and Mobile Banking
Even with some overlap in features between online banking and mobile banking, there are differences between the two.
Accessibility
To gain access to mobile banking, you'll need a mobile device (such as a smartphone or tablet) with internet access to download and install the mobile app. On the other hand, online banking requires a desktop, laptop or portable device with an internet connection and a web browser.
User interface
Mobile banking's user interface is based on mobile apps downloaded onto a mobile device. Meanwhile, internet banking uses banking websites that depend on web browsers, which may have varying user interfaces.
Security
For security measures, mobile banking typically employs a PIN, two-factor authentication and biometrics (which use fingerprint or facial recognition). Internet banking generally requires usernames, passwords, security tokens and two-factor authentication. To help protect yourself, create a strong password and avoid using public computers or public Wi-Fi networks.1
Transaction limits
Some mobile banking apps may have lower transaction limits and may offer only essential transactions compared to online banking. If you're looking for the ability to have higher transfer amounts and more services, you may need to use online banking.3 However, it will depend on your bank's policies, which can change as technology advances and consumer demand evolves.
Choosing Between Online and Mobile Banking
When you're deciding which option is right for you, start by thinking about what type of banking services and products you will need. Some people have basic needs, while others have more sophisticated requirements. You'll also want to reflect on how often you're on the go and need to access your bank accounts. For instance, an individual who works from home may lean toward online banking, whereas someone who needs to commute every day may prefer mobile banking.
There may be certain instances where you can only access banking services or products through one of the platforms. For example, if you want to deposit a physical check, you can generally only do so with your mobile app. With online banking, since you're viewing your account on your desktop, you may be able to see more detailed information compared to when you're scrolling through your mobile app.
Although some people may choose one method over the other, you can also choose a combination of both mobile and online banking. That way, you can get the best of both worlds, and your accounts are always right at your fingertips. Plus, many online banks, including Synchrony Bank, also offer mobile apps. Whatever you decide, there's no right or wrong way to go about it. If you try one method for a while and it doesn't suit your needs, you always have the opportunity to make a switch.
Banking That Fits Your Lifestyle
The best part about mobile banking and online banking is that they give you the ability to control your finances without stepping into a physical bank. So, whether you're paying off your credit card or putting money into your savings account, you can manage your finances from anywhere.
Sandy Yong is a personal finance writer, TEDx and keynote speaker, and the award-winning author of "The Money Master." She's also an avid real estate investor, owning several rental properties. Her work has been featured on a variety of platforms, including MoneySense, TurboTax, QuickBooks and Money We Have.
READ MORE: Test Your Knowledge: Facts & Fiction about Online-Only Banks
Sources/references
1. Strohm, M. and Horton, C. 5 Benefits Of Digital Banking. Forbes. April 27, 2023.
2. Milden, D. Are Banking Apps Safe? How to Keep Your Data Secure. CNET Money. February 17, 2023.
3. Podorozhko, Y. Online Banking vs Mobile Banking: They're Not The Same. MadAppGang. Accessed March 25, 2024.
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