Mobile banking is a common service in countries like Japan, though less than 10% of U.S. consumers use their cell phones to perform banking transactions. The single biggest factor for the low adoption rate is concerns over security, according to a new report by Javelin Strategy & Research.

The report, titled "2008 Mobile Banking Security Standards," said 47% of nonparticipants did not sign up because of security. Despite the lack of large-scale mobile phone attacks, 73% of consumers fear hackers could remotely access their phones. Those surveyed also expressed concern that their sensitive mobile banking data could be stolen with a wireless signal despite encryption, and more than half were worried about what would happen if their phone was stolen.

The report found these perceptions could possibly be improved, and the most effective way is by guaranteeing reimbursement of any fraudulent use of financial accounts. Other ways to tackle the security concerns include using a login method beyond user name and password, and providing e-mail alerts for particular conditions like a large withdrawal.

"With a well-designed security program in place, mobile has inherent safety advantages that make it one of the most protected channels for remote banking," the report said. "It can be used to improve overall security via the inherent speed and notification advantages of always-on, always-present mobile access."

Visa and MasterCard have ambitious mobile plans, and mobile banking is a major part of the companies' strategy. Both are already piloting programs across the country, and they are entering the mobile application space as well.

"While convenience is great, we want to make sure our moves in the mobile market cause no damage to the brand," said Simon Pugh, head of MasterCard's global mobile payments strategy. "We have, and will continue to implement, a comprehensive end-to-end security model."