PNC Bank Executive Shares Insights on First Week of First Bank Transition

It seemed like PNC Bank was hoping for a seamless merging process with First Bank last month. However, the Pittsburgh-based institution, which paid $4.1 billion for First Bank, is aware that challenges arose during the transition.

Kevin Klassen, who leads PNC Bank’s Colorado region and is a former CEO of First Bank, explained, “We put in a lot of effort to support our customers through a variety of issues.” Social media buzzed with complaints, especially on June 22 and 23, the days following the switch to PNC’s technology systems.

Customers experienced long wait times at branches, many ATMs ran out of cash, and those calling customer service faced long hold times. Additionally, some users struggled to access their new online accounts, while others had difficulty verifying identities or activating new cards.

Importantly, existing First Bank cards would continue to work until users activated their PNC Bank cards. The transition was particularly notable since First Bank was the second-largest bank by deposits in the state, leading to significant media coverage and conversations among residents.

Nearly two weeks into the change, some customers still grappled with lingering issues, including third-party vendors lacking updated account information. According to PNC, about 1.9% of customers, or roughly 15,000 out of 780,000 accounts, reported problems.

PNC executed the transition over a long weekend, a typical strategy during acquisitions, and mobilized over 600 employees from across the nation to support local staff and address customer concerns at 95 branches in Colorado and Arizona. As June draws to a close, Klassen noted that things are returning to normal.

Managing Chaos

From an external perspective, this transition might have seemed chaotic, especially for those feeling disconnected from their accounts. Yet, bank executives described the internal process as highly organized. The legacy systems of First Bank were unique, but Klassen assured that data transferred smoothly without losing any accounts or data blocks.

He noted, “The technology transition itself went well,” emphasizing that many of the challenges stemmed from customer unfamiliarity with PNC’s online platform and app. Security verification protocols can differ between banks, which created confusion for some customers.

An anecdote from Sarah Benson, a salon owner in Longmont, highlighted these challenges. She faced issues activating her new debit card due to PIN complications and needed help linking her new business account to QuickBooks. However, upon contacting customer service, both concerns were resolved. Still anxious about an old First Bank check, she visited her local branch only to find it was still valid, despite standing in a long line.

Benson reflected, “I guess it would have been helpful if I had read the documents.” As someone who prefers direct interaction, she appreciated having a human reassure her. Some complaints arose from overanxious customers, while others resulted from misunderstandings of pre-conversion information.

Interestingly, concerns surfaced that accounts might disappear or that direct deposits would be halted. It turned out that legacy accounts still function behind the scenes with original routing numbers, facilitating fund transfers to new PNC accounts. Information for scheduled payments was also migrated.

However, vendors that paid directly from old First Bank accounts needed to receive new PNC information before June 22, including services like Venmo. This difference between push-out processes, managed by the bank, and reach-in processes, controlled by vendors, could lead to potential transaction failures for customers who hadn’t communicated their new account details.

So, while PNC Bank has not established a strict deadline, customers will eventually need to update their direct deposit and bill payment information. Heidi Hurst from PNC reassured that customers would be notified if any changes occurred.

Assessing Transition Friction

This rocky transition provoked broader questions about acceptable error margins in handling sensitive financial matters. Jennifer Waller, President and CEO of the Colorado Bankers Association, acknowledged the dissatisfaction many former First Bank customers faced, especially regarding access to banking services.

However, she also encouraged a broader viewpoint, noting that the transformation involved 780,000 customers across two states—one of the largest and most complicated transitions in the region’s history. Many logistical hurdles were addressed over three-day weekends.

While the issues experienced shouldn’t be downplayed, Waller emphasized they shouldn’t define the overall transition process. “We appreciate the patience of our customers,” she said, expressing confidence in the commitment to serving Colorado communities post-transition.

A complaint rate near 2% reflects about 1 in 50 customers, appearing modest. Yet, it doesn’t account for those deterred by long waits or those who simply managed without assistance. Stephen Menotti, CEO of Menotti Enterprises, pointed out that banks often gauge success by complaint numbers, not realizing that many customers leave quietly after unsatisfying experiences.

Research indicates a stark contrast; for every complaint, many customers remain silent with unresolved issues, and this ratio often escalates with larger problems. If we apply a conservative estimate of 6:1, PNC could potentially have faced nearly 90,000 customers encountering difficulties during the transition.

Menotti, who has experience from his time at JPMorgan Chase during significant banking adjustments, noted that customers unhappy with their experience might not voice their concerns immediately. If trust is breached and issues go unresolved, it only takes one more setback for a disgruntled customer to decide to leave.

So, what’s an acceptable complaint rate? Menotti suggests that anything above 1% indicates insufficient preparation for customers. He believes that banks typically invest heavily in system migration but neglect customer readiness.

Klassen reassured that First Bank customers can expect the high level of service they had come to value, and PNC’s technological upgrades would enhance the range of financial products and services offered.

Support resources remain in place for those in need, with Klassen encouraging customers to reach out for help. “If you need assistance, we’re here for you,” he stated.