Future of Retail Banking pt. 1

Work of Tomorrow

To discuss the banking industry, Christian’s first guest on the program was Bill Demchak, the CEO of PNC Bank. Technology has dramatically changed the banking industry, both for the customers who use banks, and for the banks themselves. In their 2,800 branches throughout the country, PNC generally employs four or five employees per branch. Their roles are generally client-facing, helping customers with in-person questions and tasks. However, over the past ten years, this person-to-person interaction has decreased dramatically. About 60% of PNC’s customers today are primarily digital—they use apps and websites to conduct their banking, not visits to the physical bank itself. The increased dependence on digital media to access financial systems has also led to more cybersecurity concerns, which has meant a dramatic rise in phone calls to PNC’s call center. This As a result of these trends, PNC has had to invest more in their digital infrastructure to make it safer, faster and easier for customers. They have also had to generate new clients from their digital apps, to replace clients who no longer visit banks in person. Since fewer people visit in person, some branches have been closed—at one point, PNC had over 3,000 branches. Since visitors to a physical bank are more profitable, PNC must figure out how to replace these lost branches online. So far, they’ve been largely successful in this aim. Since fewer people are visiting physical banks, PNC also places an emphasis on better practices at branches that remain open. For example, employees are paid more in order to keep them around and offset attrition from closing branches. Customers are also able to speak with experts through online chats, over the phone, or on video at their local branches (or even in person, for larger branches). This makes the process of applying for a mortgage or a credit card easier, and PNC’s customer service improves as a result.