What’s ‘human digital banking’? Umpqua’s O’Haver explains

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Cort O’Haver, Umpqua Bank’s CEO for the past nine months, has developed a vision for the bank that he refers to as “human digital banking.”

It’s a way of preserving the customer service culture Umpqua has built over many years while combining it with technology that enables almost all banking tasks, both for consumers and employees, to be done over a smartphone.

O’Haver, who has been with the bank since 2010 and formerly worked at Mechanics Bank and U.S. Bancorp, recently shared with us some of his plans, especially around the use of the Engage software, its Pivotus arm created that lets branch staff act as digital bankers. The software and overall program, which within the bank is called BFF, was recently launched in a few branches.

Would you say that Umpqua is becoming a software company or a technology company?

CORT O'HAVER: I’ve got board members that would like to think that. I’m going to say no. Let’s be honest. We’re a bank, we take people’s money, we manage it, we protect it, we generate returns for our shareholders, but our main job will always be protecting your money and offering you financial solutions to run your lives. Do we use and consume technology to create a better experience? Absolutely. Can we use data and analytics to be more predictive and offer you better financial solutions? Absolutely. So maybe half the mission or product offering is technology and data analytics. But truly the foundation of the bank will always be around the idea that we protect and manage your money.

One thing that seems unique about what Umpqua is doing is that for now, you’ve shunned the path of trying to adopt chatbots to save money. Instead you’re giving branch staff the technology to more efficiently serve customers on the phone or through text or video. Is it fair to say you want to help keep some life in your branches because there is an investment there and there are still customers who want to visit a physical place and see a human being?

That’s a fair statement. We are always going to have stores, there are always going to be people who want to know there’s a human being behind the bank, there are people who generally want things solved face to face. So the idea of the store going away, certainly in my career, is not going to happen. We’re going to have less of them. I think it’s going to be incumbent on us to train customers to use technology to better their lives. Clearly it’s more efficient for us and cheaper delivery. But for our customers it can be a better experience. There’s no reason if you don’t have time in your day that you have to go to a bank and deposit a check any more. Where we locate stores and what we do with them, we’re debating that almost every day. Based on what we know today with our application we’ve rolled out this week, I can guarantee that discussion will be completely different in three weeks.

What did you roll out this week?

This week we put into three stores in the Portland metro market this BFF application, where you can sign up digitally for a human being to be your personal concierge banker, and with the exception of getting cash, which right now we can’t deliver through a phone, each customer can select a real person with a real name who can do anything you can do in a store. We did a soft launch. [On] Nov. 1, there will be an actual launch. We’re learning things moment to moment about our customers.

What have you learned so far?

One thing we’ve learned is that most people choose to use texting, in fact 99%, though we also offer video chat. Once they know it’s a secure environment, they give you details of financial stuff that you’d be shocked people would text. We’ve trained people for the last 20 years to not even put your Social Security number on anything, yet people will type anything in the texting environment. We’ve also learned that once they know there’s a person and they’ve gained some rapport, they have no need to physically see that person. We thought customers would want to occasionally meet their BFFs, but we haven’t yet had a request for that.

EVE CALLAHAN, senior vice president of Umpqua: The demand for it was also striking. We were hoping to bring in 1,000 customers in the first phase of the pilot, and finally had to shut it down at 1,700 because demand was so high.

Is there any danger of this becoming a popularity contest, with some employees being chosen as BFFs a lot and others not at all? Could people end up feeling bad about themselves?

O'Haver: You’re the fourth or fifth person who’s asked that. We are finding some sociological things that I had never thought about. We’re very in tune with that. I don’t have an absolute answer to that, but humans are humans.

How do the branch staff like this change to their workday, where they’re more like contact center reps?

In heavy traffic stores, it could be difficult to switch between texting and cashing a check. So how do we structure around that? Ask me closer to the end of the year and I’ll have a lot more working knowledge of how we run. In our rural stores, where we don’t have as much foot traffic, you could see people in stores using their downtime to offer financial solutions to customers online through the use of data and analytics. So we’re testing multiple models based on volume in the stores. We’re embryonic on this.

Can you tell me how the technology helps employees handle digital interactions?

Callahan: Part of what our BFFs have loved about it is the platform uses data and analytics to prioritize which customer inquiries coming in do we need to respond to first, for example. Who has something that’s urgent and who’s asking a question that could wait a couple of hours. It also can summarize months of customer exchange with somebody and bring up the most salient points. It’s giving them the opportunity to build out what we’re calling “circumstances-based banking” that might go outside the realm of what you might consider normal banking. Somebody who has an aging parent and is trying to figure out the financial ramifications of that life transition, our BFFs have come across that multiple times, so they’ve built out tips, resources and tools and the platform helps them plug into that.

O’Haver: I think most bankers would tell you that relationships are solidified around events. As a commercial lender, that’s my background, the best relationships I have had with customers were generally around something bad that happened. Maybe it was the economy or their company had a rough quarter. Working with their banker to get through those events helps deepen a relationship. When people have events in their lives — deaths in the family, babies, things that everybody goes through in this march of life — where we can add value and share things the customer hasn’t thought about yet, strengthens the relationship with the bank.

You have continued the tradition Ray Davis started of answering the white phones in each bank location that provide a direct line to the CEO. What are some of the things people have asked you or said to you lately?

A lot of people just want to see if you really pick it up. Most of the calls I get are to thank me or to thank associates by name for the things they’re doing. A customer has had a great a relationship with Susie the teller, they will say, “Hey Cort, I want you to know that I’ve been banking here 15 years, I come in here and Susie knows my name, my kids, she’s great, don’t ever lose her.” On the other side, I get calls from people wanting me to waive their check charges. I got a guy a couple of days ago who had been declined for a credit card and he was irritated, he read me the reasons for the decline. I agreed with him and four hours later we were able to correct it and get him a card.

We don’t always solve everything. A lot of times, I have to deliver the tough news like somebody in a store does. I applaud Ray and the company for, as we’ve gotten bigger, not losing that connection. I think every company should have access to the owner. I love picking that phone up. If it rang right now, I’d probably put you on hold and take the call because it’s important to me.

Editor at Large Penny Crosman welcomes feedback at penny.crosman@sourcemedia.com.

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