Banking On a New Design When Umpqua melded financial services with retail in 1995, larger companies followed. Now its cutting-edge store in Portland, Ore., is shaking up the industry again.
By Ian Mount

(Business 2.0) – Nestled in the artsy Pearl District of Portland, Ore., Umpqua Bank's flagship branch looks more like the love child of a W Hotel and a Sephora boutique than a financial institution. But its coffee nook, Internet bar, and neo-retro hues are more than just a design indulgence. The store is the latest breakthrough by the 91-branch chain whose earlier design innovations have been imitated by giants.

Umpqua pioneered the bank-cum-cafe trend in 1995 with a "bank store" in Roseburg, Ore. After the cozy redesign prompted new customers to jump from larger competitors, deposits skyrocketed and bank executives from around the country came looking for ideas. Washington Mutual announced its retail concept in 2000, and E-Trade and Bank of America followed.

To stay on the leading edge, Umpqua needed to upgrade. In March 2003 it unveiled the Pearl District store, engineered by Nike headquarters architects Thompson Vaivoda & Associates with an interior by Ziba Design. The branch is typical in size (3,500 square feet) and cost ($750,000). But by sending paperwork to a central location, Umpqua avoided wasting space on back-office operations. The result: a welcoming space that encourages customers to linger at the bank instead of using ATMs. That generates more deposits and opportunities to upsell. "I love this bank," says Lori Vickers, who switched to Umpqua from Bank of America. "I used to do deposits through the mail, but now I do them here."

Plenty of other customers have signed on too. In its first three months, the branch attracted 650 accounts, mostly transferred from competing banks. And while a typical branch in the region pulls in $18 million in deposits in the first three years, Umpqua brought in more than $21 million in just one, says D.A. Davidson analyst Jim Bradshaw. The success prompted Umpqua to open a similar store in Bend, Ore., in May 2004, and in July earned it an Industrial Design Excellence Award. Here's how the Pearl District formula adds up. -- IAN MOUNT