Branch traffic is declining as consumers gravitate toward web and mobile channels. And running branch networks remains expensive, accounting for about 50% of a bank's operating budget. But they're still important: a Novarica study shows two-thirds of consumers wouldn't choose a branchless bank. In this feature package, BTN looks at how Umpqua, Citi and Huntington are using technology to engage customers.
Lani Hayward, executive vice president of creative strategies at Umpqua Bank, had an eye-opening experience this spring while visiting a jam-packed Starbucks in Seattle at 2:00 in the afternoon. The bustle itself wasn't unusual. But she suddenly realized that these were mostly business people who weren't just stopping in for a cup of coffee on their way to or from the office. This was their office. They were conducting business for hours at a time on their laptops and mobile phones. There was not a seat to be had.
As Hayward sees it, Umpqua has an opportunity to become a small business hub more tailored to these independent business people and become a sort of proxy office they can come to day after day. With this in mind, the bank plans to open a San Francisco branch in the fourth quarter that will contain rooms with collapsible walls. These rooms can be easily reconfigured for temporary office space so customers can conduct a meeting or interview.
From most bank executives that might sound hokey, but Umpqua has a solid track record of branch innovation dating to the late 1990s. That's when it rolled out its iCafes, which gave customers and passersby a place to stop in, use a computer and have a free cup of coffee. Earlier this year, J.D. Power & Associates ranked Umpqua the highest in customer satisfaction for the Northwest region in its 2011 Retail Banking Satisfaction Study.
Some Umpqua branches help organize charitable events, some double as gallery space for local artists and some hold events like movie nights. These are examples of how the bank is successfully transitioning the branch from "transactions to interactions," says Jeffry Pilcher, a consultant and publisher of The Financial Brand.com.
"Umpqua is happy to have any kind of interaction, whether it involves art, charities or banking. It really doesn't look as ridiculous as it sounds," Pilcher says.
A progressive mentality about branch design and staff training helps Umpqua pull this sort of thing off.
"Umpqua has always been out on the edge when it comes to its philosophy around customers and customer engagement," says Edward Woods, principal at Mindful Insights, a research firm in Portland. "The café-vs.-branch approach is one way this philosophy manifests itself."
Instead of teller windows, the branches have concierge desks, like those in a high-end hotel, staffed by Ritz-Carlton-trained associates. A "discover wall" has interactive screens that showcase neighborhood events, financial tools and product information. The computer café allows people to surf the Internet and bank online. And of course there's the free coffee.
The bank is rethinking how to deliver a "relevant" experience in the branches (or stores), Hayward says. Now that so many people carry around an Internet connection, fewer need to use a stationary device in the store, "and that's changing what the iCafe should be," she says.
So the store opening in Seattle this summer will have open, comfortable spaces for people to work near one another, and some small spaces that allow for a bit more privacy and quiet.
The bank plans to take this concept a step further when it opens a San Francisco branch in the fourth quarter. Account-opening rooms will look more like living rooms than offices, since people no longer need to sit around a computer. The rooms will have collapsible walls so that they can be made larger or smaller, and they will be available to small-business customers who might be using the iCafe section of the store but would like a temporary office to meet with a colleague or to conduct a Web conference.
Hayward says the bank is rolling out Microsoft Surface technology with more engaging applications. It is also launching a pilot program for "Umpqua Live Advise" in the fall with Cisco videoconferencing technology that will allow customers to speak with experts on a full screen with a clear, crisp picture. It's a project several years in the making. "We've been waiting for the technology to get better," Hayward says.
Pilcher says the new branch design elements that Umpqua is introducing show that the company resists complacency. Most other banks settle on a template and then roll out that branch design across their footprints. "But Umpqua treats every new site as an opportunity to beta test new ideas," Pilcher says.
And there's a lesson in that for other banks, he says: "Find a sense of style and personality, and you can do that more with the light fixtures you choose than with brochures."
