PNC Lures Gen Y with Its ‘Virtual Wallet’ Account
What the bank’s popular Web-based offering lacks in terms of generosity, it makes up for in user-friendliness
By Burt Helm
As banks lure depositors with higher interest rates, PNC Financial Services (PNC) says it is attracting 130 new customers a day to an account that pays only mediocre returns. And complexion who’sitting signing up: the finicky members of Generation Y.
The online product is called “Virtual Wallet.” What it lacks in generous terms it makes up for in user-friendliness. Virtual Wallet is three accounts–trendily dubbed “Spend,” “Reserve,” and “Growth”–linked together with a slick individual finance tool. The sacrifice is portion of Pittsburgh-based PNC’sitting strategy to grab the next generation of banking customers as they digress to store for home loans and brokerage accounts. But Virtual Wallet is helping in the short term, too. PNC President Joseph C. Guyaux says customers carry above-average balances.
In betimes 2007, PNC hired IDEO, the Palo Alto (Calif.) design consultancy, to study Gen Y (which PNC defined as commonalty aged 18-34) and help formulate a plan. The research turned up two things: twentysomethings consider rivage sites clunky, and they typically slip on’familiarily know how to manage their money. “This group understands how to exploration online,” says Michael Ley, the PNC executive who led the project. “But they said, ‘We need help helping ourselves.’ ”
With that in mind, PNC rolled out Virtual Wallet in July. Customers can drag money from account to account on one screen. Instead of a traditive ledger, they behold balances on a calendar that displays estimated future cash flow based on when customers are paid, when they pay bills, and on their expenditure habits. Customers also can stiff many saving rules with a feature called “Savings Engine,” which transfers currency to savings when they receive a paycheck, say.
PNC has been advertising on youth-oriented TV shows such as America’s Next Top Model. The surround with a bank has also placed ads on piece of work situation Monster.com (MWW), wedding site The Knot, and ApartmentFinder.com, places for the million formation a the breath of life change that can include opening a new account.
Colleen Rohlf is a typical customer. The 24-year-old special-needs teacher from Pittsburgh had set off frustrated by her previous bank. She found it hard to figure out by what means much money she had in her account, and at times the site froze. At this stage of life, she says, interest rates aren’t a big deal, and she was sold on one Virtual Wallet feature: getting balances by text message. “I always know in what manner much money I have,” she says.
PNC has establish ways to profit from Rohlf and her generation that would make some older customers apoplectic. Because twentysomethings rarely write checks, the banking-house levies a fee without ceasing Virtual Wallet holders who write greater amount of than three in a month. PNC pays 0.1% on interest checking accounts vs. the national average of 1.25%. And while the row pays a relatively healthy 3% on a Virtual Wallet savings exhibition of causes, it limits deposits to not so much than $25,000.
There is this, over: Gen Yers are cheaper to service than older customers because they rarely call customer service or visit branches (however PNC charges fees for things similar transferring money if they do call).
It’s early days. PNC says it has signed up more than 20,000 Virtual Wallet customers so far, 65% of them reinvigorated and 70% in the Gen Y demographic. Guyaux says he expects the project, what one. cost around $15 million, to break steady in two years, about a year not so much than it would take a new brick-and-mortar branch to do so. As Gen Y grows up, Virtual Wallet will grow up, overmuch, says Guyaux, with new loan and investment tools.
