PNC downsizes in branch prototype

| Friday, Aug. 30, 2013, 12:01 a.m.

The PNC Bank branch that opened in July in the Bakery Square complex in Larimer never has teller lines. It doesn't have tellers.

The “mini branch” prototype is half the size of a traditional PNC branch and is almost fully automated — except for three bankers. Deposits and withdrawals are made at advanced ATMs, which accept checks and handle currency denominations as small as a dollar. The three bankers are there to answer questions and help with loans and new accounts.

The downsized PNC branch is part of an industry trend as customers rely less on tellers and conduct more of their banking on the Internet and smartphones. Banks view this as an opportunity to save money while capturing the benefits of improved ATM technology.

In the Pittsburgh area, Fifth Third Bank opened two smaller branches in June with conference kiosks instead of teller lines. Dollar Bank will debut its first in-store branch in a supermarket opening in the Hill District in two months.

Outside this market, big banks such as Wells Fargo are testing mini branches.

“The branch isn't going away, but the size and format and staffing of them is changing in response to customers' behavior that's evolving,” said Todd Barnhart, executive vice president of branch banking at PNC.

Emmanuel Afrifa, 23, of Wilkinsburg is a good example of customers who are changing habits. He moved here from the Bronx two years ago and opened an account at PNC, where he usually banks via ATM or online.

“But sometimes, I like to do business with a human being,” Afrifa said recently, after visiting the PNC mini branch. It is “convenient” because the branch is near his job in Larimer, he said.

Consumers are using telephones, ATMs, online and mobile devices to do their banking, but branches remain important, said David Albertazzi, senior analyst at Aite Group, a financial services research firm in Boston.

“Banks still need that retail presence, and a big portion of consumers still want access to a branch,” Albertazzi said. “But banks are redefining the customer's interaction and the customer experience.”

The cost of building a roughly 2,000-square-foot branch is two-thirds or less of the cost to construct a traditional 4,000-square-foot branch, said former banker Jim Caliendo, president of PW Campbell, O'Hara, which designs and builds bank branches.

Inside the 2,100-square-foot branch, PNC has a manager and two bankers to assist with customers' loan, investment or other financial needs — a staffing mix that's typical of many banks' evolving branch designs.

The Larimer location's two smart ATMs in the vestibule are accessible 24/7. The machine accepts cash and check deposits without envelopes, prints receipts with the check's image on it and cashes checks to the nearest dollar. The branch is equipped with iPads to show customers how mobile banking works.

Barnhart said PNC plans to open an undetermined number of mini branches around its 19-state footprint once it applies “the learnings” from Larimer and fine-tunes the concept.

PNC is testing other designs, too. The bank last month opened a “Solutions Center” in Malvern. The prototype is somewhat smaller than a traditional branch, with six employees and video-conferencing to handle wealth management, mortgage and business needs.

Another PNC prototype is a portable “pop-up” branch that debuted in Atlanta at the end of July. The 20-by-8-foot, steel-constructed branch is equipped with the latest online and mobile devices and will travel every three months to markets where PNC has little visibility to “build the PNC brand,” Barnhart said.

“We're seeing different experiments and new branch strategies,” said industry analyst Albertazzi.

Dollar Bank, for example, decided to try supermarket banking by opening a branch in the Shop ‘n Save store coming to the Hill District at the end of October or early November. The branch will be half Dollar's usual square footage and feature a smart ATM and a Personal Teller machine whose video screen will let customers communicate with a live teller during extended hours.

“We're trying to use as much technology as we can but want to have quality customer service by having people there, too,” said Joe Smith, senior vice president of marketing.

Fifth Third's 17 “branch of the future” locations — including two that opened in Wilkinsburg and Homestead in June — are smaller than its traditional, 4,200-square-foot branches. Instead of tellers and teller lines, the branches feature “universal bankers” who help with transactions, investments and other needs.

The Cincinnati-based bank recently piloted a small, teller-less “micro branch” in its hometown. Fifth Third officials declined to discuss details of the concept.

“Bankers are looking at different branch formats,” said Julie Hughes, Western Pennsylvania market president for Fifth Third. “Not every location requires a full-service branch.”

Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at

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