PNC is underscoring the latest trend in banking of going to lower cost, more flexible branch foot prints. The Bank is experimenting with a 'pop-up' branch located in Chicago after they experimented with a similar structure in Atlanta. The Chicago location opened today and plans to be there for three months before moving. The pop-up structure not only helps build the bank’s brand as a forward thinking bank, but allows an inexpensive way to open accounts, demo new products, talk about consumer lending and garner feedback from the area on if a future branch makes sense.
The pop-up will maintain hours from 10 a.m. to 7 p.m. and will have representatives using iPads and computers to demonstrate online and mobile banking. The branch will also have a 24 hour ATM that’s available around the clock that will be formatted to dispense currency as small as $1.00.
According to PNC, last year 38% of their customers used a non-branch channel for most of their transaction. The pop-up PNC branch is only 160 square feet and will sit in a park in downtown Chicago and will then move around through the summer to various locations. It is rumored that the Bank paid $60,000 to the City for rent and is expected to pay for itself in new accounts and marketing alone.
From a cost structure standpoint, given that it is almost $4.00 to process a transaction in a full branch, the reduced cost of the pop-up structure cuts that cost by almost 60%. While not as inexpensive as the $0.59 cost per transaction to process a transaction online or the $0.10 cost for mobile, it is a middle ground between a physical presence and a digital one.
Past experiments with pop-ups have generated initial account opening in checking, savings, money markets and credit card accounts on par with traditional branches.
Hopefully, PNC’s efforts will inspire you to think creatively about branch design and channel management. We will continue to monitor performance of these pop-ups but believe that for those banks that still desire a physical presence for transactions, this has its place in the branch delivery plan.
Submitted by Chris Nichols on May 16, 2014