COVID-19 Pandemic Has Changed The Banking Industry

Mar. 28—The COVID-19 pandemic has dramatically changed the way people bank and the industry will probably never be the same.

Banks shifted services to online platforms, restricted access to their branch lobbies and required customers use drive-up methods or make appointments last year and some are still doing that.

Many banks, like PNC Bank, also have shrunk the number of branches and consolidated.

PNC Bank closed a branch at 501 Wyoming Ave., West Pittston in February and consolidated it with another branch less than three miles away at 281 Main St., Dupont.

It also closed another branch at 1000 Wilkes-Barre Twp. Blvd. in Wilkes-Barre Twp. and combined it with a branch at 960 Schechter Drive, Wilkes-Barre Twp.

Marcey Zwiebel, director of corporate relations for PNC Bank, said PNC Bank provides 90-day notifications about branch consolidations and she couldn't say if there will be potential consolidations beyond that.

"Regardless, the consolidations that we have been implementing — in every market where we have a retail presence — are reflective of the fact that the way customers are using branches has been changing," Zwiebel said.

Digital transactions at PNC Bank have exploded during the pandemic and Zwiebel said about 77% of customers used non-teller channels during the fourth quarter of 2020.

Also during the fourth quarter, deposit transactions via ATM and mobile channels were 66% of total deposit transactions, she said.

"These shifts in the way customers are conducting their banking transactions are important inputs that inform our branch consolidation decisions," Zweibel said. "The reality is there are more ways to bank with PNC than ever before via online, mobile, ATM, phone, etc. and we have continued to see customers taking advantage of the investments we have made in all of these different channels."

At the same time, Zweibel said PNC Bank officials also recognize that branches continue to be important for many customers who still want a face-to-face conversation when it comes to major financial decisions such as discussions about mortgage, loans, retirement and investment.

"That is why we try to most effectively and efficiently meet customers where they are, which requires an ongoing investment in alternative banking methods while maintaining an effective branch network for the face-to-face transactions and financial wellness discussions customers still want to have," she said.

Ivon Creagh, Greater Pennsylvania region president for Wells Fargo, said throughout the pandemic, Wells Fargo also has restricted access to branch lobbies and asked customers to make appointments.

Today, a small percentage of branches are temporarily closed. In Wells Fargo's open branches, she said measures are in place to "ensure we can serve our customers and keep our branches safe."

"In our branches, we are offering some services by appointment only, we have installed protective barriers, enacted social distancing measures, required customers and employees to wear face coverings and are performing enhanced cleaning," Creagh said. "We've encouraged our customers to use our mobile and online banking tools as much as possible."

Creagh said the pandemic has accelerated a trend toward digital banking that has been growing among consumers for some time.

Precautions put in place around COVID-19 provided the impetus for many consumers to try new ways of doing things, including how they interact with their financial institution, she said.

At Wells Fargo, she said mobile deposit dollar volume was up 110% year-over-year from 2019-2020 and reached a record high.

Mobile deposits usage was up 36% year-over-year which is also a record high and digital logins were up 11% year-over-year, she said.

"From talking to our customers, we know that after the pandemic subsides, many will choose to continue to use digital options for their banking transactions while there are others who will choose to come back to our branches for their financial needs," Creagh said.

After the pandemic, she said the delivery of consumer bank products will evolve as customer preferences evolve.

That evolution will include an increase in digital capability and a decrease in the number of brick and mortar branches, she said.

While there will be fewer brick and mortar branches, she said they also will evolve to meet the needs of customers but there still will be a place for in-person interaction.

"As technology improves, in-person interactions will become more efficient as bankers will be able to provide financial options more quickly while still providing thoughtful advice," she said.

While some banks have been closing and consolidating branches, others have been expanding.

Dunmore-based Fidelity Bank recently announced plans to acquire the Pittston-based Landmark Community Bank for $43.4 million. The sale is expected to close in the third quarter of this year.

Once the merger is finalized, Fidelity will have 25 community retail banking offices in northeast and eastern Pennsylvania.

Daniel J. Santaniello, president and CEO of Fidelity, said the merger will generate additional jobs and the office on North Washington Avenue in Scranton may be consolidated into the corporate headquarters once it's completed.

FNCB did not close any community offices recently, but it opened a new location in Mountain Top in 2019 and built a new main branch in Dunmore.

In addition to its corporate headquarters in Dunmore, FNCB operates 17 community offices in Northeast Pennsylvania and like most businesses, FNCB spokesman Michael Cummings said COVID-19 has impacted its operations.

Almost overnight, its back-office operations transitioned to work from home while branches shifted to drive-thru, appointments and digital banking, he said.

"During the time of limited operations, we continued to pay and provide benefits to branch staff required to stay as home and encouraged back office staff to work remotely," Cummings said. "Thanks to protocols that were in place prior to the pandemic and robust digital banking options, we were able to quickly make these transitions while still meeting the needs of our customers."

FNCB also became a leading local lender in the Small Business Administration's Paycheck Protection Program and guided more than 1,000 businesses in the market through the application, funding and forgiveness process.

While lobbies at FNCB were closed at the start of the pandemic and when there was a spike in cases in December, Cummings said the drive-thrus remained open and people could schedule appointments. On Feb. 22, FNCB reopened its lobbies with social distancing and mask policies in place.

Since the pandemic started, he said digital transactions have increased 20-30% at FNCB.

"Because of the success customers have had using digital banking options, there's no doubt we will see continued adoption as new technologies evolve," Cummings said. "However, traditional brick-and-mortar branches, especially at the community bank level, will not be disappearing. Customers will still seek face-to-face interactions for trusted advice on important personal financial decisions. Our focus will be providing both an outstanding digital and in-person experience."

As bank lobbies closed or limited hours during the pandemic, a survey from Foresight Research showed that satisfaction among customers tanked. The survey also showed more people switched to credit unions, which generally have lower fees and better interest rates.

Jill McGlynn, chief experience officer for Cross Valley Federal Credit Union, said the credit union has seen growth over the last several months in membership both in deposits and new accounts.

She said credit unions were fortunate that they were deemed essential during the pandemic and they found new solutions to better assist members even when lobbies were closed.

Credit unions made a major shift toward greater technology and implementing it across many different channels, she said.

"Although navigating the 'new normal' has been a challenge this last year, it has also been an opportunity for positive change and growth in the way we serve our members and communities, even in the toughest of times," McGlynn said. "We are also grateful to our staff and members were able to adapt so quickly."

Cross Valley Federal Credit Union's main office is on Baltimore Drive in Plains Twp. and it has additional locations in Wilkes-Barre, Forty Fort, Dallas, Mountain Top and Scranton.

The credit union initially closed its lobbies in March last year and reopened them in June and then closed again in November amid a surge of COVID-19 cases and reopened in January.

Although it's not required, McGlynn said they encourage members to schedule appointments through the credit union's Facebook's page or website at www.crossvalleyfcu.org.

Since reopening again in January, she said they have seen a major shift in members still focusing on using eService and contactless solutions and they continue to encourage it.

The credit union, which has been part of the community for more than 50 years, also has been offering extended hours in its member service center, a call center where staff is available by phone, chat, social media, email and secure messaging Monday through Friday until 7 p.m. to meet people's financial needs.

McGlynn said when they could no longer provide face-to-face assistance for members, their focus shifted to encouraging digital migration and transforming its members service call center to be more readily available to members.

"Although our lobby doors were closed, we opened our phone lines up and digital communication channels so that more of our staff would be accessible to help walk members through utilizing our services and helping them complete their transactions through the safety and comfort of their own home," she said.

McGlynn said she believes the changes that occurred because of COVID-19 will prove to be permanent and the changes will be viewed as "new opportunities."

"The digital world is here to stay," she said. "I think the pandemic helped Cross Valley to recognize what digital or remote services we were missing to truly be able to better serve our members."

Ivon Creagh, Greater Pennsylvania region president for Wells Fargo, said these are three most important lessons she learned in her job amid the pandemic:

If the business world wasn't changing rapidly enough pre-COVID, the pandemic drove home the need for all of us to take flexibility up a notch as we interacted with customers and employees. Some of the most important lessons we learned were around the importance of connecting with customers to see how we could be of service and add value.

As part of this, learning how to effectively perform my role virtually was critical to the success of my team.

And the importance of the art of listening took on even greater significance. Being a better listener, especially since in-person meetings were not advisable, helped greatly when interacting with customers and employees.

Contact the writer: [email protected], 570-821-2115, @CVAllabaugh

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