PNC plans to do away with tellers
PNC Bank plans to get rid of teller lines — and traditional tellers — in most of its 2,700 branches across 19 states within five years, its chief executive said on Tuesday.
The branch reconfiguration is driven both by changes in how customers do their banking and by PNC's quest to maximize revenue at a time when banks are dealing with higher regulatory and other costs.
William Demchak, CEO of parent PNC Financial Services Corp., told analysts at the Goldman Sachs Financial Services conference in New York that its branch makeover would drop the ratio of traditional branches to one-third of total branches in five years. About 90 percent of PNC's branches are traditional.
“We're going to remove tellers,” said Demchak, who stressed the need to further cut costs.
PNC eliminated about 600 teller jobs across its system this year, shifting many of those people to sales and other customer service jobs. The moves were part of the banks' aim to slash overhead by $700 million this year, a target PNC is on track to exceed.
PNC cut about 200 branches this year across its footprint, including 14 in the Pittsburgh area. The bank will eliminate 25 more across its 19 states next year, Solomon said.
The “vast majority” of tellers who work at branches that will be converted in the next five years will become “financial consultants” in what the bank calls “universal branches,” said PNC spokesman Fred Solomon in an email. He wouldn't be specific about layoffs.
A universal branch has no teller counter or window area. Instead, it features a “concierge desk,” where customers are greeted by a financial consultant who helps with investment, mortgage or retirement needs, as well as transactions.
But for many transactions, the financial consultant shows customers how to do them online with an iPad, Solomon said. Customers also are directed to an enhanced ATM (automated teller machine) for cashing checks or withdrawing cash.
Solomon said only 18 percent of PNC customers visit a branch to do most of their banking anymore, with more of it done online, at an ATM or via mobile device.
Bank customers generally are visiting branches less often. The average number of teller transactions has fallen to 15.6 in 2011 from 19.1 per hour in 2005, according to research cited by Celent last year.
“It's clear consumers are more comfortable with other channels to do most banking transactions,” said Tom Feltner, director of financial services for the Consumer Federation of America.
“But it's important to many customers to have that face-to-face with a teller when they do important transactions,” said the consumer advocate.
PNC is in the process of converting 45 traditional branches, including three in Western Pennsylvania, to universal branches. The three local branches are in Burgettstown, Indiana and Perryopolis.
The Pittsburgh bank introduced its universal bank concept in November in 14 states. It also introduced a nontraditional “mini-branch” this year, including one in the Bakery Square complex in Larimer in July, which is a third the size and the cost of a tradition bank.
A number of banks, including Wells Fargo, are experimenting with nontraditional branches and staffing, said Bert Ely, a veteran bank consultant in Alexandria.
“It's a great concept,” said Ely. “But the key is execution, and that's not easy.”
In the Pittsburgh region, Fifth Third Bank has introduced nontraditional branches without teller lines. It opened two smaller branches in June in Homestead and Wilkinsburg that have conference kiosks and “universal tellers” to help with a variety of banking needs.
The branches have “performed very well, above the norm for a new Fifth Third branch,” said Julie Hughes, president of the Western Pennsylvania market, declining to provide specifics.
Fifth Third is evaluating whether to introduce more of the branches in this market, Hughes said.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at firstname.lastname@example.org.