How safe are app-only banks?

kuepper

I'm less worried about hacking but more about what would happen if they went bust or if I died. I know about the £85k limit but as they're app only how would I be able to prove I had money with them if they went bust as presumably the app would no longer be functioning? Also if I died how would anyone know I had money with them as my phone would be locked?

k_man

Is that fundamentally any different to a traditional bank, if you have gone paperless?

400ixl

How would anyone what what bricks and mortar accounts you had unless you had told someone? Many banks are paperless now so it's not like you get statements in the mail.

Likewise for proving you had money there if they have gone bust, it would be the same for either, they all have systems and administrators would be appointed.

There are safeguards put in place for these types of scenario's but equally you have to take some responsibility for what people need to know if the worst should happen.

kuepper

k_man said:

Is that fundamentally any different to a traditional bank, if you have gone paperless?

I think so, non app-only banks have websites where info is stored and recoverable

400ixl

The website is just an interface to a backend, an App is just an interface to a backend,  a desktop app in a branch is just an interface to a backend.

Those back ends run in data centres or on hyperscaler cloud environments in the same way regardless of whether they are traditional or challenger banks.

There really is little difference.

sebtomato

My only worry with app-only banks is if I lose or break my smartphone. Might be difficult to set everything again on a new phone, unlike a traditional bank with a website.

Also, how long Monzo or Starling are going to be around, if large players like Chase/JP Morgan are going after them with better products...

k_man

sebtomato said:

My only worry with app-only banks is if I lose or break my smartphone. Might be difficult to set everything again on a new phone, unlike a traditional bank with a website.

Also, how long Monzo or Starling are going to be around, if large players like Chase/JP Morgan are going after them with better products...

There will be challenges if you lost your smartphone, but should all be solvable, albeit may require a phone call.

On the second point. If Monzo or Starling 'go away' it wouldn't be overnight, so switch to a different bank.

Rob5342

Whoever you bank with your account just resides on a backend somewhere.

I doubt Starling or Monzo would just disappear, it seems more likely they'd be bought by someone else first.

k_man

Rob5342 said:

Whoever you bank with your account just resides on a backend somewhere.

I doubt Starling or Monzo would just disappear, it seems more likely they'd be bought by someone else first.

That may also be a reason to switch. Customer experience often takes a hit when systems are merged following acquisitions.

penners324

I've just switched phones and use Starling, Chase & Marcus.

It was easy to set up the apps.

Your fears are pretty much moot

k_man

penners324 said:

I've just switched phones and use Starling, Chase & Marcus.

It was easy to set up the apps.

Your fears are pretty much moot

Was that a phone swap, or replacing lost/broken?
I think the process if most complex if the phone and mobile number change, without access to the old ones.