PNC Financial Services Group Inc. on Tuesday said it will convert more than 60% of its branches to a new automated model by the end of 2026.
Basic transactions previously conducted by a teller will now be completed via ATMs and video banking.
The initiative is already underway at 30 branches with another 50 slated for conversion in October.
As of March 31, Pittsburgh-based PNC operated 2,600 branches across the country. As of June 30, 2021, it had 27 office locations in the seven-county Milwaukee area and $2.4 billion in total local deposits, making it the seventh-largest bank in the area, according to Milwaukee Business Journal research.
The changes aren’t just in PNC’s legacy territories, said Kevin McCann, executive vice president, and growth and innovation executive, but will span even newer regions that PNC entered over the past couple years, including branches added through its 2021 acquisition of BBVA USA Bancshares, a deal that took PNC's retail presence coast to coast.
“All territories, all areas, are going to go through this evolution over time,” said McCann, who began his career at PNC 20 years ago as a branch manager at an in-store supermarket branch in New Jersey. “We look at a lot of data, but, to be honest, customers dictate how they’re using us and where they’re using us. We try to have big ears in terms of what customers want and that won’t change over time, as much as we have a game plan. The pandemic accelerated digital usage. People didn’t see us as much for transactions, but they still come to see us for those meaningful moments when they need guidance and insight.”
Deposit transactions via ATM and mobile channels were 66% of total deposit transactions in the first quarter of 2021, PNC (NYSE: PNC) said, compared with 59% a year earlier.
The automation initiative doesn’t mean staffless branches.
“You can’t substitute having that person shoulder-to-shoulder with you,” McCann said.
Lobby queuing and advanced appointment setting will still be available. But PNC said its employees will now have more time to hold in-depth conversations, and offer financial and technical assistance to customers. PNC expects overall branch employment to stay consistent.
“What changes is what they’re doing with their days; that will change,” McCann said.
But it’s an evolutionary process, he emphasized. It’s not cookie cutter — customer needs at one site in, say, the Pittsburgh area could be very different from another branch in a nearby location. PNC is not saying at this point how much the conversion will cost nor how much it stands to save or gain from the initiative.
For all the tech talk, the converted branches will have a home-type look.
“It’s not a significant amount of physical change,” McCann said. “The biggest change is people and choreography, making sure we make spaces where people are comfortable. Some of the new branch elements look and feel a lot like a kitchen island, or offices feel more like home spaces. It’s not massive overhaul. It’s making sure our people are equipped to help these folks with the needs they have in the new environment, understanding how and where to help.”
PNC has been experimenting with branch designs for at least a decade, striving to strike the balance between customers’ comfort levels and the surging shift to digital transactions. There was the prototype PNC developed in Pennsylvania at the Waterfront retail development in Homestead three years ago that had a smaller teller space and emphasized tech. Then there’s a branch that opened in May 2021 in Rostraver Township, about 4,000 square feet, that combined “three branches on a freestanding site with lots of easy ins and outs, lots of technology and employees who aren’t tethered to a station,” Jim Balouris, executive vice president of PNC retail banking in southwestern Pennsylvania, said at the time.
How the branch changes tie in with closures isn’t clear.
“We’re always evaluating the branch network,” McCann said.
PNC continues to prune branches, telling the Pittsburgh Business Times two months ago that it expects to have shuttered 105 this year by the end of June. It had 2,600 by the end of March, about 600 of which were added with the BBVA USA acquisition.
PNC has not said how many branches it plans to close in 2022 nationally or locally. It continues to add offices in its newest markets, though these are outpaced by the cuts in its legacy footprint. PNC finished 2021 with 109 net closures, according to a report by S&P Global Market Intelligence.
The branch automation conversion was announced on the heels of an announcement last week about a change at the top of PNC's retail business. Long-time leader Karen Larrimer is retiring and Alex Overstrom will succeed her, effective on July 1.
