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

At PNC Elite 8 honoree Tom Kunz is creating targeted products that will appeal to a generation with a different mind-set about financial services.
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."

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 aniPhone 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.' "

The Backbone of Banking

As other banks do, PNC looks at technology as the backbone of its operations. The goal, according to Kunz, is keeping the customer at the center.

"That's our operating philosophy in IT," he says. "Most financial products and services are very information-based and digitized. Technology can do so many things. The challenge is determining which ones to focus on that add value to the customers while helping the business."

With 26 years under his belt at PNC, Kunz no doubt has left his mark on how the bank's IT shop supports the business. PNC was his first employer after earning his M.B.A. "At that time, banks tended to hire people with finance backgrounds," he explains. "But banks were starting to ... look for people with more product manager-like qualities as well. I ended up on the IT side when someone said to me, 'ATMs are going to be important, and they'll replace the teller. Why don't you work in that area?' So I started in IT with electronic payments."

Still, like many of his counterparts, Kunz finds he straddles two worlds when at work. "When I'm with the IT people, I'm generally considered the business person, and when I'm with the business side, I'm generally considered the IT guy. I never created code or software. I just focus on what I can do for the customers based on technology that can meet their needs."

The Elite 8 2009

The pure dynamics of financial IT, Kunz says, keep him on his toes. "There's a lot of competition in the industry, and it's easier for others to enter the industry," he explains. "You have to sleep with one eye open and try to assess what you can do with technology and determine what the customer would buy."

Of course, it helps to surround oneself with reliable people. For Kunz, this means letting staff excel in a collaborative workplace -- both within IT and between IT and the business. "This is easy to do because I work in the most fun areas of financial services," he remarks.

Being in such a consumer-focused area of the bank, it's natural that Kunz would find possibilities for informal market research in some unlikely places, such as talking to his kids. "I have my personal lab of friends and family that help further my understanding of customer behavior," he explains. "I also do a fair amount of reading as well."

"Fair" might be an understatement, given the 300 Web sites he has bookmarked on his computer. And, Kunz notes, the list grows as his team sends him new links -- all in his quest to gain a deeper understanding of the consumer.

It also helps that he's an active user of social networking outside the office. "I use all those social networking tools because of my role at PNC," Kunz says. "If I didn't have this role, I'm not sure how active I'd be. The privacy issues around having people follow what I'm doing on Facebook are not something I'm really excited about. But ... Facebook is sometimes the only way I can keep up with my kids' soccer teams."

This type of collaboration, according to Kunz, is what PNC is hoping to capture as it ramps up its efforts in the social networking space. "PNC's view of social networking and mobile is that, as they get mainstreamed, there are implications for creating brands in a customer-driven way. There will be new ways to engage, find and segment customers," Kunz explains. "Things we're doing with the Virtual Wallet are the tip of the iceberg. There's a fundamental shift in how we deal with customers and create a brand."