PNC Financial Services Group is actively preparing to counter the increasing efficiency of deposit movement, a trend exacerbated by advancements in artificial intelligence. Chairman and CEO William Demchak stated on Thursday, October 15, during the bank’s third-quarter earnings call, that banks must compete by providing superior solutions as technology makes it simpler for clients to transfer deposits in pursuit of higher interest rates.
Demchak’s remarks came in response to an analyst’s inquiry regarding the potential impact of agentic artificial intelligence on deposit stability and the associated costs for banks. PYMNTS had previously reported on October 6 that AI agents possess the capability to eliminate the friction that historically kept funds in non-interest-bearing bank accounts, thereby accelerating deposit mobility.
The Accelerating Pace of Deposit Mobility
The CEO underscored that the movement of deposits has been progressively becoming more efficient over several years, a trajectory he expects to continue. He cited existing tools, such as capital market portals, which already enable clients to compare and select money market funds. Demchak elaborated, “All that stuff is going to get easier, and this is going to happen over time.”
To navigate this evolving landscape, PNC’s strategy hinges on a dual approach: advanced technology and cost-effective service delivery. Demchak articulated, “To win in that period of time, we’re going to have to offer our clients technology that is as good as these third-party providers, so we can allow them to do what they want, and, importantly, we’re going to need to produce it cheaply to keep their business.” Robert Reilly, Chief Financial Officer at PNC Financial Services Group, further emphasized the necessity to “maintain the service aspects of a transaction account,” highlighting the enduring importance of human-centric support alongside technological prowess.
Demchak’s Stance on Agentic AI Transactions
While acknowledging the transformative potential of AI, Demchak expressed strong reservations about agentic AI transacting on a user’s behalf within their accounts without explicit, secure oversight. He labeled such attempts as “incredibly unsafe” and asserted, “not going to happen” under current conditions. Demchak stressed that for such functionalities to be viable, significant regulatory and infrastructural changes would be prerequisite.
“For that to ultimately take place, there’s going to have to be laws passed on liability shifting,” Demchak explained. He added that any such system would require “secure connections and authentication and human-in-the-loop.” Dismissing the notion of unsupervised AI transactions as mere “big splashy headlines, cool thing,” he reiterated, “Not going to happen on my watch that something can come in here and transact on your behalf without you knowing it. It’s an incredibly dangerous thing. Independent of the fact I run a bank, I would just advise everybody that’s probably bad.”
PNC’s Internal AI Transformation and Strategic Investments
Beyond external competition, PNC is also deeply invested in deploying AI within its own operational framework. Demchak assured stakeholders that the bank has already completed foundational work, including data center rebuilds and the establishment of a robust risk framework for access control. This internal transformation is part of a “well-thought-out program that isn’t about bells and whistles, that will ultimately allow for a transformation of this company,” he stated. CFO Robert Reilly confirmed that this transformation is expected to unfold significantly over a two- to three-year period.
In the third quarter, PNC demonstrated its commitment to enhancing client experience through tangible investments. The bank launched a new mobile banking app, as announced in a July 7 press release, featuring improved navigation, faster load times, and a customizable design. Concurrently, PNC continued its physical expansion, with an August 3 press release confirming the bank is on track to open 55 new branches in 2026. This represents the largest number of branches the bank has built in a single year, underscoring a multi-channel strategy. Demchak summarized these efforts during the earnings call, stating, “We continue to invest in capabilities to enhance our franchise with the introduction of both new mobile app and TotalRewards program, as well as our continued branch expansion.”
PNC’s proactive stance, combining strategic technological enhancements with a sustained commitment to physical presence and personalized service, positions the bank to navigate the evolving dynamics of deposit retention. By focusing on both digital innovation and traditional client engagement, PNC aims to maintain its competitive edge in an increasingly AI-influenced financial landscape, ensuring clients find compelling reasons to keep their business within the institution.
