Home / Banking Strategies / The original mobile banking is finding new purpose

The original mobile banking is finding new purpose

Todd Barnhart and Chris Hill from PNC Bank join us on the BAI Banking Strategies podcast to discuss how they’re taking to the road to reach underserved communities.

Apr 11, 2023 / DEI & ESG
BAI Host
Guest
Guest
Share
Subscribe:

Mobile bank branches have been around for years, but its versatility is giving it a growing role at some institutions.

Todd Barnhart and Chris Hill from PNC Bank join us on the BAI Banking Strategies podcast to discuss how they’re taking to the road to reach underserved communities.

A few takeaways from the conversation:

  • PNC is closing some physical branches, but mobile branches are not seen as replacements; the bank considers them complementary to its brick-and-mortar locations.
  • A key measure of mobile branch success is the number of interactions in the service areas – is that number growing and are they interacting with a broader range of people?
  • Another important measure of success is how effectively the mobile branch bankers can deepen the education and advice relationship with the underbanked.

INTERVIEW TRANSCRIPT

Todd Barnhart, head of retail distribution at PNC Bank, and Chris Hill, mobile branch channel manager, welcome to the BAI Banking Strategies Podcast.

BARNHART: Great to be here, Terry.

HILL: Thank you.

Chris, you oversee the mobile branch channel at PNC, so let’s start our conversation with what comprises this channel at your bank, including the services that are provided, and how did you get into the business of having branches on wheels.

HILL: Well, we’ve had branches on wheels here at PNC for over 15 years. Like many financial institutions, we started off in a purpose for disaster recovery, natural disasters, and we’ve migrated that over the years most recently. We have a variety of vehicles and sizes and configurations and the services we offer close to a 100% of a branch experience to a light version of that. We got into this business really as a genesis of a conversation that came from Bill Demchak, our chairman, and specifically how we could leverage assets like these to go and serve low-to-moderate-income neighborhoods and help bring banking to those populations of people.

Chris, PNC has a fairly extensive footprint across the US. You have locations in 29 states, I believe, spread across North, Southeast, and West. How much of a footprint does the mobile branch channel have relative to your overall business reach?

HILL: These mobile branches, of course, are incredibly affordable, so we really have the flexibility and the capability of going anywhere that were needed to support our network. We do have the majority of our distribution of mobile branches on the East Coast and through the southern states presently, but we are moving from one side to the other side as needed.

Todd, let me ask you to pick up the overview from here. As the head of retail distribution, your job includes setting the strategy for how PNC optimally connects with your retail customer base and also how to grow that customer base. In that context, can you tell us how do you think about mobile branches and where they fit into the broad strategic vision at PNC?

BARNHART: When we think about who PNC is and aspires to be every day, we have a mantra that we use about being a Main Street bank, and what that means is we’re a bank inside the communities that we serve. When we think about the mobile units, it really is an opportunity to extend the coverage, if you will, of who we are in communities we may not have a physical presence in, or certainly complimenting communities that we may have a physical presence in.

A big part of our vision at PNC is to be a strong bank and a strong business. We need to have strong communities, so the mobile branch vision was born out of Bill’s idea around how can strengthen and educate communities that we generally operate in in financial wellness or financial education. The mobile branch gives us the flexibility to do that in a way that frankly no other channel or medium has allowed us to do.

How does that work? What’s the flexibility that introduces for you that, as you say, you could not have achieved in any other way?

BARNHART: If you think about banking as being we have a branch, and we certainly, we do this, invite people to come into a branch and do educational seminars or other things, but sometimes that can be intimidating, frankly, if they’re not a customer or they’re not comfortable in a bank environment. So, a beauty of the mobile branch model that Chris has developed is taking a mobile unit and going to places where people in the community already are. And those are partnerships with community groups, which is integral to the vision here, and I can let Chris speak to that a little bit more, but that I would say is the fundamental difference is taking the capabilities of a bank branch, and taking them to where people are comfortable going and having a financial education experience.

HILL: If I may just add to that, Todd stated it well, how we train our dedicated teams on these trucks and how we deliver the experience when we show up, we have our own channel theme of meet them where they are, not only physically as Todd mentioned, but financially. This channel affords us the opportunity to visit those community members and everyone is in a different place in that financial journey. Some are unbanked or underbanked for a variety of reasons. Some have relationship with a financial institution, whether it be PNC or otherwise. We lead that conversation in finding out where they are and how can we help. They may not ultimately choose to bank with us, but I tell our teams all the time, “If you can help get that person standing a little straighter on their, if you will, financial feet, you’ve made a difference.”

Now that you’ve been at this for a while, I’m guessing that you’re getting a more well-rounded sense of what these mobile branches can do for you and also what their limitations might be, so I want to ask each of you to share a little about the challenges that you’ve encountered in your respective role when it comes to mobile branches that are different from traditional branches. Todd, let me ask you to start…

BARNHART: I would say the technology in the truck, the unit itself is very cool, but as we know, technology evolves quickly, and so what might be in a mobile unit in five years from now could be very different, but what won’t be different is the talent. I think one of the big challenges that frankly we’ve probably underestimated is what type of individual you need to have be part of a mobile branch, a mobile banking unit. It is very different than just plucking somebody out of a nearby branch and having them do what is ultimately a very different role. It is more educational and bicentric, but it also has the realities of setting up and tearing down what’s effectively a glorified RV and driving a 30-plus foot truck sometimes through an urban narrow street, so the mix of skill sets and the talent to be a great banker, a great community advocate, and also literally rolling up your sleeves was an interesting talent mix that took a while for us to find, and Chris has done a great job finding the blueprint for what we looked for.

HILL: Terry, probably the biggest learning that I’ve had out of this is that technology that we put on these trucks was never designed to go down the road. ATMs are built with the expectation that they’re sitting on a foundation and networks aren’t built to vibrate around, so we’ve had a lot of learnings in that particular area so that when we go from point A to point B, all of that technology comes up and online for us in delivering a good customer experience.

Besides the ATMs that you say are sensitive about being jiggled around so much, what other technology are you packing into what Todd calls that “glorified RV”?

HILL: Everything you’ll find in a branch is on that truck, from networks and routers and security and DVRs and cameras, all were never built to go down the road.

BARNHART: Card issuance machines, another example of that.

HILL: Yeah, instant card issuance machines also on the truck so we have that ability in the moment to issue that for a customer is a phenomenal value add, but there’s a lot of potholes in America, as we all know, live every day.

Todd, like many, or even most of the nation’s biggest banks, PNC is looking at its existing branch network and trying to figure out what that network looks like going forward as more and more Americans take to digital banking for their basic transactions. A recent news story put the branch count for PNC at around 175 closures in the first half of 2023 around your entire footprint. A mobile branch has the advantage of being able to cover more than one place. How do you see it as a potential replacement for traditional brick-and-mortar locations?

BARNHART: In the early days of thinking this through and what a mobile branch could be, as well as even now as we sit here four months into 2023, we don’t see it as a replacement for branches. It was born out of the idea of being complementary to who we are as a bank. It is not a factor that we consider when we think about our network strategy broadly. It’s a factor in our corporate strategy and our community strategy. But when we go through our network optimization discussions, where we’re going to close branches, but also where we’re going to build branches, where we’re going to put ATMs, and obviously thinking through the digital elements that are so part and parcel of the way most of America banks today, we view these units as complementary to our corporate strategy and corporate vision, not a replacement for traditional bank branches. They just serve two very different purposes, at least as we’ve seen in our experience to date and as I can look as far over the horizon as I could possibly look, it’s a complement to, not a replacement of a traditional bank branch.

Chris, picking up on that view of the future role of mobile branches within the PNC network, how do you envision the mobile branch channel growing or evolving its impact in the next few years? This can be in terms of geographic reach, in terms of the types of customers targeted, the types of services provided, or even the kinds of partnerships that you’ve alluded to with the communities in which you operate these mobile branches.

HILL: As you’re probably aware, the numbers I’ve seen is somewhere around 20%, give or take, of our country is unbanked or underbanked and so the opportunity to contribute to diminishing that number is pretty amazing. I’m not sure that PNC with its program, which I consider pretty robust, will make what kind of a dent we can make in that number. But we feel that we make a difference every day that we’re out in those communities having those conversations. That being said, the delivery channel for financial services is just in the last four months, it seems to change at a faster pace than ever. I’m not sure where that’s going to lead, but what I’m really excited about is the flexibility that we have in these assets and following the guidance from our senior leadership here – how I can respond and be nimble to those changes and go after that shared objective of PNC, so we’ll see where it takes us.

Todd, you were talking a little bit before about the challenges of finding people and finding the right people, so I guess finding a banker who can also manage a commercial driver’s license and be able to lift and heft and do all of those things. But I want to ask you about staffing for your branch channel more broadly, whether it’s for these mobile branches or for your more traditional branches. Many banks are envisioning their branches as advice centers in the future because in these digital times, there’s less demand for the types of services that branches have historically provided. Is PNC on board with the advice center model? If so, what are some of the key staffing considerations that you’re dealing with so far in terms of finding enough people, and perhaps even more importantly, finding the right people?

BARNHART: I would certainly put the talent acquisition and retention as one of the top challenges for banking going forward for the very reasons you mentioned. Certainly, to your question, are we on board on the advice-centric model? I would argue yes, for sure and would even argue I think we’ve led that in many ways as we’ve thought about some of the expansion efforts that we’ve done over the years, even including the mobile branch effort, so very much believe that the way people expect to use or will want to use a bank branch is evolving to less transactional and more centered on advice and guidance, financial wellness if you will. What that means for the talent is, I would say two things specifically, but related. One is the digital savviness of the people that we hire is paramount, and that is regardless of whether it’s in a traditional branch or whether it’s in a mobile branch or anything in between, because part of the new account onboarding experience, the day-to-day interactions, people want to get guidance. Again, it might be over the phone, it might be in the branch, it might be in a mobile unit – “How do I use online banking? How do I use mobile deposit?” The ATM, or video banking, or all the other technologies and the things that we haven’t even envisioned yet, they’re going to look to their banker to explain that, so I need to have a level of digital savviness in my bankers that heretofore probably wasn’t needed, certainly if I look back five years ago, and certainly 10, so that would be one piece. The other big piece is, where do you go to get talent? I need people who are willing to engage clients more outreach-based, sometimes doing more out-of-branch activities, not necessarily in the traditional model of wait for the client to walk in, meet with the teller to deposit a check, and then get referred over to the platform or asked to have a meeting. The mobile units are probably the best representation of this. But in every branch that we have today, there is an expectation of being out meeting with community groups, meeting with small businesses, and so that in-branch/out-of-branch comfort is something that is, again, if you are used to working in a traditional bank branch for the last 20 years, that can be more challenging if you think about what working in a branch will look like over the next five.

To finish up our conversation, I’d like to ask both of you about what success looks like in your mobile branch program in the coming years. You’re trying to bring more banking services to areas that are currently underserved, and in doing so, you’re trying to make a difference in people’s lives in these areas, but how do you know when you’re actually making a difference? Todd, you go first.

BARNHART: Listen, it’s a hard thing to measure, admittedly, and I think we’ll continue to evolve how we might measure that. But certainly, the principal measure we use today is “how many interactions do we have?” Is it being utilized when we’re at a particular community group? Chris has a set schedule. We show up on Tuesday afternoon at a particular place. Do we see that interactions changing? Do we see continued conversations with maybe some of the same individuals? I would say those are more qualitative measures that we use to think about success, as opposed to some of the traditional metrics one might think of from a bank. The other thing I would add is, what is the feedback from the community partners that we are, in effect, doing business with or partnering with? What is the feedback they may get after the mobile unit pulls away, and how that continues to grow? Maybe we’d see more demand than we have supply, be a nice measure of success, but Chris, let me turn it to you.

HILL: Yeah, and I think to build on that, we do see with some of our deeper relationships with community partners, we get referrals to other organizations and other organizations come to us asking, “Hey, we’re seeing you over there. Would you entertain us?” In addition to getting referrals from organizations, what I pay close attention to is the structured financial education that we’re delivering at those sites. When I mean “structured,” focused seminars. We are like a focus group out in the community. Each day we visit a partner and we listen carefully to the themes that we hear, and over a period of time, a trend will develop based on the partner and they’re not consistent from partner to partner. When we hear that trend, we’re able to zero in on content, work with that community-based partner, and offer that free financial educational seminar inside that partner at a time that’s convenient for the community, not just when the truck is there, but when does that community respond. That is one of my key measurements of success. The other, to build off of Todd’s comments, is we pay very close attention to those consultative conversations we’re having beyond the “hi, hello” and the niceties of an introduction. When we sit down and can have that consultative conversation with that consumer about where they are, back to meeting them where they are, that is a measurement of success that we use in defining, “Are we making a difference or not?” Fortunately, we’re seeing quite a bit of that. We feel really good about the program.

Todd Barnhart and Chris Hill from PNC Bank, many thanks again for joining us on the BAI Banking Strategies Podcast.

BARNHART: Thank you.

HILL: Thank you.