12:10 PM
Connect Directly

Focus on Innovation: Umpqua Bank Views Innovation as a Core Value

In its 'Innovation Lab' and other high-tech branches, Umpqua Bank tests the latest technology to improve the banking experience and build stronger customer relationships.

The way David Hawkins, director of experience innovation at Umpqua Bank, answers his phone is a stark reminder that one is placing a call outside the New York City region. "World's greatest bank!" is his upbeat greeting. One's mild surprise and even amusement quickly turns to admiration -- here's a workplace that has one of those positive cultures one reads about. To a layoff- and budget-cut-weary New Yorker, Portland, Ore., where Umpqua Bank is based, sounds like some kind of utopian paradise.

We called Hawkins to find out how Umpqua Bank's Innovation Lab and overall "branch of the future" program, in which it tries out new technologies for interacting with customers, are going. The latest Umpqua branch opened in Portland in December. Like all of the bank's branches -- or "stores," as it refers to them -- the new branch features an Internet cafe, large interactive touch screens and amenities such as coffee and cookies. And soon Umpqua branches will support high-end videoconferencing.

A recent Gartner survey proclaimed that 50 percent of the world's banks will lack a formal innovation program and budget by 2013, which the Stamford, Conn.-based analyst firm says will severely restrict their growth as pressure from governments and regulators makes them risk-averse and inflexible. Recent Bank Systems & Technology surveys, too, have found bank IT budgets to be flat, with discretionary spending especially tight. So how is Umpqua able to set aside money for innovation while so many of its competitors are still in post-crisis mode?

Open-Door Policy

Hawkins explains that innovation is one of the bank's core values. "The Innovation Lab came about because we were looking for a way to get customers to come in the door," he says. The idea, according to Hawkins, was that Umpqua branches would be showcases for new technologies.

Umpqua's experimental, innovative new branch.
Umpqua's experimental, innovative new branch

But where to put the first big showcase branch? Two years ago, the south waterfront area of Portland was developed into a promising new neighborhood of LEED-certified, energy efficient high-rises, Hawkins relates. "There was all this synergy that was going to happen on the riverfront," he says. "It was going to be sustainable and high-tech, and it seemed like the right place for us to place an Innovation Lab and make it a destination for people to come in and see what's going on."

In planning this 3,800-square-foot branch, Umpqua partnered with Microsoft (Redmond, Wash.), Cisco (San Jose, Calif.), Planar (Beaverton, Ore.) and other technology providers. "It was going to be a place close to headquarters for us to try new technologies out safely before rolling them out across the footprint, hence the name 'Innovation Lab,' " Hawkins says of the showcase branch. "Our tendency is to try things, hopefully fail fast, learn from what we've done and then do more of what works. We don't focus-group a ton of things. We don't go through lots of navel gazing about what we should be doing; we just do stuff."

One new technology being tested in the Innovation Lab is high-end videoconferencing, leveraging Cisco's Unified Meeting Place. Branch customers can connect with bank experts at other locations, including investment advisers, mortgage lenders and commercial bankers, according to Hawkins, who reports that Umpqua is working with Cisco to improve the interface of the telepresence technology to make it easier to use for associates and customers and improve the experience. For example, the companies are shifting away from Web cameras and desktop monitors to directional cameras and 42-inch, wall-mounted flat panels. (High-end telepresence technology tends to be costly, but Cisco is giving Umpqua a price break for this pilot, according to Hawkins.)

The number of videoconferencing users so far has been small because of the slow growth of the overall neighborhood, acknowledges Hawkins. But the bank plans to extend the videoconferencing capability to 7 to 10 additional locations this year to help determine its value. "We think there's a huge opportunity because we're in a lot of smaller, distant locations in small towns where it doesn't make sense for the stores to be fully populated with all the expertise that might be available in an urban location," Hawkins explains.

1 of 2
Comment  | 
Print  | 
More Insights
Register for Bank Systems & Technology Newsletters
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.