How safe are app-only banks?

[Deleted User]

k_man said:

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

You still have some option of a branch and the ability for those staff members to contact other departments.The back office staff may even have access to other banks in the group e.g. NatWest having access to RBS accounts.

k_man

Deleted_User said:

k_man said:

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

You still have some option of a branch and the ability for those staff members to contact other departments.The back office staff may even have access to other banks in the group e.g. NatWest having access to RBS accounts.

Not sure that helps in the following areas raised in the OP though:

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?

Edited to include post I was replying to.

Rob5342

Most people bank online and don't get statements, so it makes no difference whether you are with an app only bank or a high street bank.

Olinda99

k_man said:

Not sure that helps in the following areas raised in the OP though:

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?

I suppose one way your family / executor would know you have an account with Chase if you died is the debit card in your wallet or in the drawer?

masonic

Olinda99 said:

k_man said:

Not sure that helps in the following areas raised in the OP though:

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?

I suppose one way your family / executor would know you have an account with Chase if you died is the debit card in your wallet or in the drawer?

It probably behoves us all to make things as easy as possible for our executors by detailing our financial accounts in a document they can gain access to if we should pass, whether we use app only banks or prefer branch based accounts. It saves on the detective work.

k_man

Olinda99 said:

k_man said:

Not sure that helps in the following areas raised in the OP though:

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?

I suppose one way your family / executor would know you have an account with Chase if you died is the debit card in your wallet or in the drawer?

Sorry I realised I hadn't included the message I was replying to (now added to my previous post).

My point was that the bank having branches wouldn't help much in these 2 examples.

scoot65

k_man said:

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?

I was just thinking about this yesterday. Not so much the dying bit, but what proof would there be that I had money with the bank if there was a problem with the the bank's IT,   the app disappeared or the bank stopped trading. It seems that all that linking me to my cash deposits is a small piece of software.......

Can anyone tell me how do banks deal with this?
   

[Deleted User]

scoot65 said:

k_man said:

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?

I was just thinking about this yesterday. Not so much the dying bit, but what proof would there be that I had money with the bank if there was a problem with the the bank's IT,   the app disappeared or the bank stopped trading. It seems that all that linking me to my cash deposits is a small piece of software.......

Can anyone tell me how do banks deal with this?
   

They probably have back-ups - data centres and cloud.

masonic

scoot65 said:

k_man said:

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?

I was just thinking about this yesterday. Not so much the dying bit, but what proof would there be that I had money with the bank if there was a problem with the the bank's IT,   the app disappeared or the bank stopped trading. It seems that all that linking me to my cash deposits is a small piece of software.......

Can anyone tell me how do banks deal with this?

The bank's electronic records are the definitive record of who owns what. This applies to all customers and all types of bank account. Banks have regulatory obligations around the storage, security and backup of information, and would probably be compliant with the ISO27000 series of standards around information storage and security. The major insolvency and business recovery firms have forensic accounting units that could be called in if necessary.

Having personally gone through the situation where a small investment firm (just a few employees), which fraudulently altered the FCA register to appear on it, but which was not FCA authorised, went into administration, just after the directors stole a six figure sum of client money, took steps to destroy the company's records, and stopped paying the data centre that was previously hosting the backups, I can't emphasise enough the importance of having your own records, whether you maintain your own transaction ledger, or simply download and keep the pdf/paper statements all banks, including app-based ones, issue. This will at least allow you to verify that any account information you are provided after a business fails is correct.

Despite in the above situation the company's records being destroyed, and the backups being lost when the hosting provider terminated their services for non-payment of fees, the administrators did successfully reconstruct the financial records. So it goes to show, things would have to get pretty grim for these records to be completely destroyed.

See https://www.lancashiretelegraph.co.uk/news/19949574.lancashire-brothers-ran-failed-lending-platform-deny-diverting-nearly-700-000/ for details of the firm mentioned above.

400ixl

scoot65 said:

k_man said:

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?

I was just thinking about this yesterday. Not so much the dying bit, but what proof would there be that I had money with the bank if there was a problem with the the bank's IT,   the app disappeared or the bank stopped trading. It seems that all that linking me to my cash deposits is a small piece of software.......

Can anyone tell me how do banks deal with this?
   

Banking is a regulated industry and they have to operate under a license. This has a whole series of procedures they have to put in place which include proving solvency and customer base etc on a regular basis.

Provided you have chosen a bank which is licensed then it is no different whether they have bricks and mortar branches or not.

With a bricks and mortar bank, what do you think links you to your money, other than some software? If the IT system goes down there is nothing anyone in a physical branch can do, anymore than a call centre for a bank with an app.