BS&T: How is online banking different today than it was in its infancy?
Hasan: The first iteration of online banking in the early 1990s attracted early adopters and innovators. Back then we used to analyze the profile of the online user since it was so different than the profile of the mainstream banking consumer. Today there is no demographic or behavioral distinction between who is online and who isn't. Online banking has also evolved from a servicing platform to include sales and service fulfillment.
BS&T: Has there been a tipping point in the adoption of online banking?
Hasan: As with any new technology, platform or capability, there is a period of adjustment as the consumer gets to a baseline level of comfort. Even though the technology was ready, the benefits of online banking weren't realized in the 1990s because consumers were not yet comfortable with the technology. Banks came to market with lots of online-based solutions they believed would address customer needs for efficiency and convenience, but technology got a bit ahead of consumer expectations and comfort levels. There was a disconnect between the promised versus realized benefits.
Today consumers -- rather than technology -- are leading the movement to online banking.
BS&T: Why is it strategically important to integrate online banking into other delivery channels?
Hasan: More customers are coming to the bank through the online channel first, making it one of the critical emerging distribution channels for financial products and services. This is where consumers do their homework. But the online channel still does not have the capability to complete transactions such as mortgages end to end. Customers will touch more than one channel depending on the complexity of the transaction. If the experience moving from one channel to the next is disruptive, you will lose the power of the online channel. If the online experience is not friendly and rich, then the customer will not go to another channel.
BS&T: What role does online banking play in building customer loyalty?
Hasan: Until recently the online channel has been used mostly for cross-selling and building relationships with existing customers, while the branch has remained the biggest source for attracting new customers. But once the customer establishes the banking relationship, the online channel becomes the most efficient way to develop and deliver real-time customized services and products that build customer loyalty.
BS&T: How about online banking's role in attracting new customers?
Hasan: The online channel is well positioned to be a very effective channel for new customer acquisition, but it will need to evolve further. Since you treat a prospect differently than you treat an existing customer, we need to create a humanistic experience online similar to walking into a branch that engages a prospect.
We also need to provide tools and capabilities that allow both prospects and existing customers to do analysis and create their own solutions. We need to acknowledge that consumers are in control of the transaction. We have to think from the customer perspective, give them choices, provide them with information and empower them with knowledge.
BS&T: How do security challenges impact online banking?
Hasan: Banking is built on trust. Therefore security is our absolute No. 1 priority. We are very cognizant of evolving and changing fraud schemes, and design our products to protect customer information and include checks and balances even if that means introducing some inefficiency. We don't compromise security.