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PNC's Tom Kunz Cracks the Gen Y Code With Targeted Products

Contrary to what many bankers believe, PNC Financial's Tom Kunz says, electronic channels will be the key to forging stronger customer relationships with the new generation of banking consumers.

Whoever said adults don't "get" younger people never met PNC Financial's Thomas Kunz. As SVP, director of payments and e-business with the Pittsburgh-based bank, Kunz is responsible for developing one of the most Gen Y-targeted banking products in the industry: PNC Virtual Wallet.

Virtual Wallet is a mobile banking tool geared toward the 20-something set. According to Kunz, it was designed from the ground up to speak directly to the way that generation uses the mobile channel and views financial services.

"For PNC, it's about how we bring the brand to life," explains Kunz. "We heard from our younger customers that they expect things to be a little different. ... For this generation, their financial lives and nonfinancial lives are more integrated than they ever were for previous generations."

Kunz says PNC ($291 billion in assets) looked to South Korea as a model for how mobile banking in the U.S. could evolve and also observed the emotions with which its young customers view money. "Many banks think of their customers in an accountant's terms," Kunz says. "[But] Gen Y doesn't reconcile checkbooks, and they don't believe in float. For them, their balance is their balance. So it's a different emotional mind-set and behavior with this segment, and we think we're on to something because customers have been very satisfied with Virtual Wallet."

Thomas Kunz, PNC Financial
Virtual Wallet is available online and as a mobile application. It offers what PNC calls a "high-definition online view of your money," along with features such as a tiered savings account (for long-term and short-term savings), a calendar, a wish list and electronic bill pay. PNC also launched an iPhone app for the service this past summer. Kunz notes that it was designed to take advantage of the features of the iPhone itself -- for instance, users can transfer funds between accounts by sliding a finger from one side of the device's screen to the other.

Kunz says innovative products such as Virtual Wallet are just the beginning of the evolution of the banking and payments space. And he's bullish on the role banks will play in the payments arena in the future. "There will be some strong, trusted bank brands that will own the payments space," he says. "Banks' share of payments continues to decline as nonbanks erode their share with new technology. But the strong bank brands will gain."

Part of this evolution, according to Kunz, will involve the development of more customer-centric products beyond free checking and products that do more with the information around payments for corporate clients, as well as a shift toward using the Internet more as a social and mobile tool. PNC already leverages YouTube and social networking sites for its customer experience efforts.

"Mobile and the Web are more pervasive in the fabric of how Gen Y interacts," he explains. "PNC has a YouTube channel for Virtual Wallet, along with Twitter and Facebook accounts where we interact with and market to customers. There's a perception that as the world moves to electronic, it's harder to create an experience with customers and get to know them. We say the opposite: Electronic channels let customers create their own brand experience in a way they can't in the off-line world.

"Customers prefer using multiple channels. Getting good at predicting what they want to do in each channel is part of the 'secret sauce.' "

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