Are budgeting apps safe

Are Budgeting Apps Safe? What experts have to say

In our article, A Beginner’s Guide to Budgeting, we mentioned that one of the growing methods for budgeting is mobile or computer applications. Before you register on a budgeting app to help you manage your money, one question stays on your mind “Are budgeting apps safe?”

We are in an age where applications are being made for everything. Many of us handed over our bank details to these budgeting apps to monitor our spending or even receive extra benefits.

Are budgeting apps safe

New research has shown that more people are worried about the personal information they give out. According to a report from The Clearing House, over two-third of customers who have a bank account are concerned about their data privacy when they give their bank information to non-banking applications.

Are Budgeting Apps Safe? – The Risks Involved

Those who are concerned about their data have very good reasons to be. Many of these fintech companies ask for your bank credentials for them to do their work. This is commonly known as screen scraping, and many in the bank industry consider it a very risky activity. 

It is not only risky because you just gave someone your bank details, but also because you don’t know what they’re doing with it. If there’s a hack because the app took so much data and your money is lost in the process, who gets to pay for it?

Most of these questions are not answered, and these are the risks people take when opting for budgeting apps.

The Facebook and Cambridge Analytica scandal came after people began voicing their concerns about budgeting apps, further proving that many don’t know what really goes on behind the scenes.

Are Budgeting Apps Safe? Here’s What You Should Know

As said earlier, we are in the tech age. Even if our concerns keep growing, we are not going back to the period where we wrote things on paper and hoped to stick to the plan in our heads. 

Mint and the other budgeting apps are still widely used, even by people who made their concerns known. Everyone likes an app that would help them pay back a loan, buy a house, and manage their money.

People know that these apps are taking valuable data, but they are willing to risk it because of the benefits they enjoy for them. 

For instance, those who know they are overpaying for a loan feel that using budgeting apps to pay for the loan weighs more than the risk of giving out personal data.

According to a study, customers make this decision because their banks do not provide them with such features.

Can You Enjoy Your Budgeting Apps and Be Safe?

The question “Are budgeting apps safe?” becomes “How can I use my budgeting apps safely?” It is quite obvious that nothing much is changing about how budgeting apps operate and what they require to assist you in managing your money.

A survey by Bankrate showed that people want more control over the data they give to fintech companies. They want to call the shots. According to the survey, over 56% of people using these apps are tired of news on data breaches and want the amount of information they give to be based on what they’re willing to share.

The financial industry has started working on helping customers to fix this problem. A few banks have partnered with fintech companies which allows you to uses these apps without handing over your bank credentials.

Recently, Forbes said even though word has been going around for a while about partnerships between banks and fintech companies, it is no piece of cake. While the bank and fintech sectors would be connected in a way, there can’t be a one-on-one partnership between them.

So, having your data secure and using budgeting apps without any worries may not be happening any time soon.

How do you get things done and stay safe on your own?

How to stay safe and reduce data risks

You definitely cannot wait for the finance industry to get themselves together before you start doing what you want. You’re going to continue using these applications to organize your budget and make your financial planning easier. To stay safe and avoid worries whenever you give your bank credentials to these budgeting apps, there are a few things you can do.

Know what budgeting apps really do

Research has shown that many people know the functions of budgeting apps and but some people only consider them as apps that store bank information. In contrary to this belief, some budgeting apps that collect your bank records do more than store them. That’s why those who know how it works, ask the question: “Are budgeting apps safe?” Some of these data aggregators login on your behalf to carry out some operations, and sometimes give out your data to other companies. When these fintech companies are sold, your data may also end up in the wrong hands.

Use them at your comfort level

Some apps require you to aggregate all your bank accounts so they can determine how much you have and spend and also help you organize your spending. Several people don’t like to throw all their eggs in a basket, and this isn’t a bad thing. If you don’t want to connect all your accounts, don’t do it. Put only the ones you’re comfortable sharing.

Read the disclosure before signing up

Before you sign up for any budgeting app, read the disclosure properly to understand your rights and what exactly the app is offering you. When you check out the disclosure for many apps, you would realize that some differ from others.

Protect your phone

These days, we have people who don’t like to protect their phones with passwords. If you’re using an app that connects with your bank account, you should keep your phone protected. Imagine you forget your phone on the cafeteria table and someone gets a hold of it. Some of us who forget passwords easily have them autosaved on our devices. In this case, a stranger has complete access to your account.

Know which apps can access your bank data

Many people sign up with a lot of applications and submit their bank credentials everywhere. It is important that you know which apps you gave your bank details to and delete the ones that you don’t make use of. 

Complex password and password protection

For both your phones and applications, use complex passwords that someone who knows you wouldn’t easily decipher. Your name, birthday or other information that is so easy to get should never be used as your password. Else, it becomes very easy for hackers to get in and steal from you.

Moreover, your passwords should be changed immediately you stop using a budgeting app. After deleting some apps you’re not using anymore, some of them still have your details. Although you would have to update your bank details on the apps you still use, this is a small price to pay.

Pay attention

Many people don’t pay attention when they receive warnings of unusual activity. Sometimes when they see these signs themselves, they do not report it. This is wrong. If you notice anything unusual about your site or application, change your password immediately and let the company know about it. Don’t wait until something terrible happens.

Be discreet in public

Do not use anything related to your bank whenever you’re using public WiFi. If you are to check out something on your budgeting app at the airport, in a private company, or at the coffee shop, ensure you use your cellular data and log out immediately you’re done. Also, make sure no one is watching you.

A Quick Recap

Here’s our answer to ‘Are budgeting apps safe?’ in a few words-

The rewards of using budgeting apps outweigh the risks. They can be safe enough for you if you follow the right procedure and keep yourself protected. Financial institutions are still working on a way to keep your data private, but until then, it is up to you to stay safe.

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