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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 "Slow Banking" Movement

Umpqua's vision for its branches of the future goes well beyond high-definition video. Among the bank's top goals is "creating a differentiated customer experience," Hawkins says. "Everybody knows all banks do the same thing -- we all sell the same stuff. How do you set yourself apart?"

Since the 1990s Umpqua has used a retail store metaphor to stand out. The next "neighborhood store" is due to open in April, reports Hawkins, who says it will incorporate many of the technologies and ideas that have worked best in the existing stores and the Innovation Lab. "We create places where people feel comfortable hanging out, spending more time with us -- we call it the 'slow banking' movement," he relates. The bank invites people to spend time in the branches. It offers computer cafes where people can surf the Web, and it serves Umpqua's "signature blend" coffee (or a latte, americano or cappuccino) as well as cookies. It even holds frequent community events in branches to get to know customers better (see related sidebar).

"If somebody spends more time with you, you're going to have a chance to get to talk with them, get to know them," Hawkins says. "And when they want to talk about finances and their financial situation, you're going to be in a better position to make recommendations and cross-sell."

At the same time, the bank recognizes that technology has changed people's banking habits and the ways they want to interact with their bank. "The Innovation Lab was our first real push at an integrated channel experience," says Hawkins.

That experience includes a lot of interactive digital signage in branches. Typically a branch features a 25-foot-long touch-screen product marquis wall (the bank calls it a "discover wall"). "Two years ago it was a lot harder to find a touch solution than it is right now," Hawkins notes, explaining that the wall is made up of three sections and allows several people to interact with it at once.

The wall highlights bank product information and community happenings, according to Hawkins. It displays LocalSpace, Umpqua's own social networking site, which is designed to connect and assist local businesses in a virtual setting. Customers also can activate podcasts on the giant plasma screens and listen through directional speakers.

Umpqua doesn't try to nail down a return on investment for any of these specific technologies, but it does see overall benefits, Hawkins reports. "We tend to attract a higher-value customer, we tend to see a better cross-sell ratio of products to household and customers tend to stay with us longer," he asserts. "So over the course of time, the lifetime value of our customers is relatively high."

Ultimately, Hawkins adds, the bank is growing in size and market share and is profitable. "We don't have the ability to collect the data in a way that would let us say that digital signs really pushed that DDA account over the top, so we're going to do more of that sign," he acknowledges. "We're still a pretty small bank. It comes down to, we're going to try stuff, we're going to be different, we're going to try to lead within the industry and see how it goes. So far it's gone pretty well."

Sidebar

Community Connection

As part of its "slow banking" movement, which is designed to draw consumers into branches and help build strong customer relationships, Umpqua Bank branches host regular movie nights and boast electronic community bulletin boards, where customers can upload events for display in the branch and on the bank's Web site. Umpqua even has installed Nintendo Wii game consoles.

"Our Wii bowling night is huge," relates David Hawkins, director of experience innovation and creative strategies at Umpqua Bank. "That was kind of unexpected. It's not really what we were thinking about when we designed the branch, but it’s serendipity -- it's worked out and it's been a draw."

Asked about his game, Hawkins says, "My five year old is the one who's got the killer game. Me, not so much."

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