Researchers at Javelin Strategy and Research were stumped. Despite strong annual increases in smartphone adoption, one of their recent studies showed no corresponding increase in the consumer adoption of either mobile banking or mobile e-commerce. The findings seemed counterintuitive.

“Many of our own researchers are avid mobile banking enthusiasts,” Philip Blank, managing director for security, risk, and fraud at Javelin, wrote in the October issue of Bank Technology News. Blank said he expected his research to show “hordes of consumers running headlong into this brave new mobile world.”

But the survey data didn’t support his expectations. In fact, despite a significant increase in smartphone penetration, mobile banking remained nearly the same from 2010 to 2011. Mobile banking increased only 1% from 2010 to 2011, while smartphone adoption increased more than 25%.

Blank and his team decided to go back to the data to see if they could detect any patterns. They looked at the question of how consumers view the safety of mobile banking while using a smartphone. “When we saw the results,” said Blank, “we were blown away and realized they provided an important key to understanding the findings.”

The data showed that a growing number of consumers believed their smartphones are either unsafe or very unsafe. Essentially, consumers were saying: We’re buying smartphones in droves, but we’re not yet comfortable enough to use them for mobile banking or online purchases, and we perceive these devices to be either unsafe or very unsafe.

Consumers believed that using the mobile phone Web browser is more secure than using a downloaded application by almost a 2-to-1 margin. Given the publicity that malware has recently received, Blank says consumers might have this one right—at least for now. (The survey was taken before a series of bogus applications were removed from the Android Market.)

The interviews contained in our "Mobile banking security" story and Tools of the Trade section (“Mobile providers tackle security concerns") paint a picture of a relatively new technology that invariably comes with consumer security concerns—until that new technology proves itself to be secure.

Just as with online banking, it will take time—and an investment in infrastructure—to convince consumers that mobile banking is secure.