Umpqua has been at the forefront of the digital branch based banking model since before it was a thing. Following it’s $2bn purchase of Sterling, Billy Bambrough talks to EVP Lani Hayward about how much more the bank still wants to do
Is Umpqua Bank the coolest brand in banking? If it isn’t, it is certainly trying to be, and hitting pretty close to the mark. If you were lucky enough to catch EVP of creative strategies Lani Hayward at The Financial Brand Forum 2014 at the beginning of April you have gotten a glimpse of the kind of image that Umpqua is trying to convey – one that is, for lack of a better word, cool.
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One of the big questions for banks today is where to open new branches. Long gone are the days of having a bank branch on every street. These days you get one branch (or "store" as Umpqua insists on referring to them as) in a town, and that’s if you’re lucky. Umpqua’s approach is though a bit different from other banks.
"We want to open stores in area’s that don’t shut down in the evening, Hayward tells RBI, "In many cities the financial centres all close early and are seen as very boring and stuffy. We want to put a branch where people want to go in the evening."
The physical locale is important to Umpqua. Hayward believes that people make their choice of bank based heavily on its location.
"Our solution has been to build ‘neighbourhood’ store versions of branches. We want to connect to the community and be really involved with the life there."
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By GlobalDataThis is just one part of the continuing Umpqua strategy to change the nature of the branch. Ultimately the bank would like to have stores that do not need tellers at all.
Hayward says: "I’m hoping that in a year from now we’ll be building stores that don’t have a teller row at all, that people will come in and be able to interact with the bank staff in a much more informal way."
In Umpqua’s flagship store in San Francisco this is already beginning to become a reality but Hayward recognises that this can be a difficult transition for the customer, standing starkly from what the customer has come to expect from day-to-day branch banking.
"Our final goal here is to bridge that physical and digital gay so there is no gap at all. In the industry today people talk about using different channels, but there is little in common between these channels and this is what we’re are trying to solve."
At the beginning of April Umpqua finalised its plans to absorb the struggling Spokane-based Sterling Financial. This is the largest of Umpqua’s purchases in it’s 10 year spending spree which as seen the bank more than double in size.
Umpqua is paying about $1.9bn in stock for Sterling and will acquire its 176 branches in Oregon, California and Washington and at the end of 2013 Sterling Financial had assets of $10.3bn.
"The consolidation of the industry is going to continue. For better or for worse it is going to go that way. We’ve grown organically but we’ve also grown due to acquisitions. Every time we make an acquisition we have to reignite the culture, the strategy and make people buy into the brand.
"This Sterling acquisition will be the biggest challenge so far."
Due to the 20-odd acquisitions Umpqua has made since Hayward has been with the bank she feels the bank has become well versed in how to go about it.
"When we do an acquisition, and the first thing we’re going to do with Sterling, is to make sure the culture of Umpqua is transferred over.
"This is the biggest part of an acquisition and something that people coming into the company find suprizing. For example, at 9am, every employee at Umpqua has an ‘inspirational moment’, to do something to motivate them. This is something we’re disciplined about."
Hayward is candid about some people’s reaction to this on joining the bank. It can be hard, she says, in the same way some people take a while to get used to answering the phone with the bank’s slogan
"Welcome to the world’s greatest bank."
"A few of the 2,500 associates that are about to come onboard are going to hate that, but eventually they are going to embrace it and have fun with it."
Hayward backs up the claim to be ‘the world’s greatest bank’ saying: "It’s not a slogan, it’s not a tagline, it’s a state of mind, and I challenge you to find a bank that is better.
"You see it when you walk into our stores, when we answer the phone, it’s what we strive to be."
The banking landscape is changing hugely around the world and while Umpqua is doing well at moving with the times, the state of the market in 5 or 10 years time will be undoubtedly different.
Hayward says: "The fundamentals of banking are going to move further towards digital and people will become comfortable with doing everything on that channel.
