Meet Ray Davis, The Legendary Architect Behind The Most Admired Banking Brand on Earth

How did Ray Davis, featured keynote speaker at The Financial Brand Forum 2017, take a $150 million bank with a handful of branches in rural Oregon and turn it into a $24 billion powerhouse with 330 locations in five states? By being obsessed with branding, culture and the customer experience.

Inside every Umpqua Bank branch, there is a shiny gold phone. Pick it up, dial the number “8” and you will be connected to the bank’s president and CEO, Ray Davis.

If he is sitting at his desk, he’ll answer. Typically, he says, the caller just wants to know if the line really works.

This isn’t the only thing that’s unique or unusual about the way Umpqua Bank does business. In fact, hardly anything about Umpqua is ordinary or expected.

Starting with their name.

Pronounced “UMP-kwa,” the name doesn’t quite roll off the tongue. But that hasn’t prevented the bank from becoming one of the most admired financial institutions in the world. Indeed, having a differentiated name has helped Umpqua build what is probably the strongest brand in the U.S. banking industry.

Umpqua’s brand is undeniably chic, contemporary and stylish. Their sense of design and identity is about as close as you’ll find to something akin to Apple anywhere in the financial industry. But the 60-year-old financial institution wasn’t always so cool. In fact, it wasn’t until Ray Davis took over as president and CEO in 1994 that Umpqua started to acquire its status as a sophisticated — and yes, even hip — bank.

But using such a distinct word like “Umpqua” as the bank’s name wasn’t an easy choice for Davis. His initial instinct was to abandon the arguably awkward moniker so he could pursue his mission to refashion the bank with something more traditional, like “First National.” But thankfully a consultant convinced Davis not to change the name, saying it would make the bank indistinguishable from other generically-named institutions.

“To this day I’m convinced that’s the best advice,” Davis confesses. “It would be First National, or something else equally uninspiring. Umpqua is such a great name.”

Back when Davis took the reins, Umpqua Bank only had about $150 million in assets and six branches serving a tiny geographic footprint in rural Oregon. But in the span of 20 years, Davis turned it into a regional powerhouse, with over $24 billion in assets and 330 locations in five states — Washington, Oregon, California, Idaho and Nevada.

The growth rate is simply astonishing. The bank is over 150 times bigger than when Davis took command. And yet the brand is widely celebrated across the banking industry as being “remarkably local” — no small feat for any institution with billions in assets.

“We have to grow because size is important in our industry, but we will still operate small,” Davis explains.


Inspired By The World’s Greatest Brands

According to Davis, the key question driving strategy discussions at Umpqua has been, “How can we get people to drive by three other banks to get to ours?” That question has steered the bank’s team to look outside the financial sector for inspiration.

They have drawn on some of the world’s best brands for inspiration — Apple, Starbucks and Nordstrom, for instance — to create a truly unique branch experience. Umpqua Bank does some fascinating things with their branches, which they refer to as “stores.” It’s almost like each new store is another new experiment in financial retailing.

Umpqua Bank’s slick flagship branch in San Francisco’s Financial District is a good example. It looks like a cross between an Apple Store, a Starbucks and a W Hotel, and that’s no accident. The location was deliberately designed to feel more like a contemporary store or upscale café than a bank branch. It features mobile concierges, iPads, interactive touch screens, outdoor seating and a free “loaner” bike.

At the core of Umpqua’s concept is the idea of “the-bank-as-community-hub” — turning the branch into a truly local fixture within the communities the bank serves. That’s why Umpqua’s stores host events such as movie nights, yoga classes, how-to seminars, Christmas-package decorating and homeowner association meetings.

At one, a photographer took dog glamour shots.

“There was a line out the door for that one,” Davis says smiling.

Through their “Local Spotlight” program, Umpqua features small, local businesses from around the community in its branches. These businesses not only get to showcase their products, some can sell them (without any markup from Umpqua). Businesses are rotated quarterly, pending approval of a simple application. The “Local Spotlight” display at many Umpqua locations are booked months in advance.

At a time when more consumers are banking on digital devices, it may seem odd for a bank to invest so heavily in branches.

“Banking is a relationship business. Customers still want personal contact — not every day, but when they want it,” Davis explains. “We’ve got to get in front of people. That’s our challenge. That’s a huge challenge for our entire industry.”

He says too many banks are focusing too heavily on the technology side.

“I think they’re doomed,” Davis says without even a hint of hyperbole. “I think that the only way a business can differentiate itself in this industry is through the customer experience.”


Obsessed With The Customer Experience

Ray Davis looks at banking very differently than other CEOs in the industry. He likes to ask employees and executives, “What business do you think we’re in?”

“We’re in the banking business,” most reply.

“No,” he says. “We’re in the customer experience business.”

“Banking products are a commodity,” Davis explains. “You can’t differentiate yourself that way. The big guys are just going to copy any good new product we come up with. But they can’t copy the way we deliver the service. They can’t copy our experience.”

And we aren’t just talking about “good” customer service here. We’re talking about great customer service. For instance, one time when a business banking customers’ payroll vendor made a mistake that was going to delay paychecks for some 200 employees, Umpqua associates from around the area came together to cut replacement checks, then hand deliver them until every one of the employees got paid.

The obsession Davis has with Umpqua’s customer experience ties directly back to the culture the bank cultivates and instills in employees.

“While the design of our stores is important, it’s what happens inside them that really matters, and that’s the result of our culture,” he says. “Our culture brings our stores to life, and differentiates Umpqua’s customer experience. We empower our people to create an extraordinary experience for customers without having to ask permission. And in our stores, that means our people are empowered to program their store with events and activities that will resonate in their community. It’s not dictated from above.”

Davis has hired Ritz Carlton trainers to teach employees customer service, etiquette and public speaking. He says this has helped fuel “strong organic growth.”

“Executives in the banking industry always ask, ‘How do you get your people to do that?'” Davis says. “It’s the culture we’ve built over the last ten years. It doesn’t just happen. You don’t wake up one day and say, ‘Gee, look at this great culture we’ve got here.’ Our culture is our single biggest asset, hands down.”

Umpqua, which has been recognized by Fortune magazine as one of the “100 Best Companies to Work For,” indeed has an enviable corporate culture. Every year, full time employees get 40 hours of paid time off, called “Connect Time,” to volunteer in the community. Associates are paid to participate in causes and charities they are passionate about.

There are also “team recognition funds,” where a certain amount of money is provided to each branch or department for team and customer recognition. For example, if someone has done something nice for you, you use the money to buy them a little treat. The money is also meant to go towards customers. For example, if a client is in the hospital, an associate may buy them flowers. There’s another fund that team members fill with their own money and use to buy each other birthday gifts.

Then there is the “President’s Club,” known as “Ray’s Club.” To join the club, you must first be nominated then approved by three-quarters of the existing members. Once you’re in the club, you get to attend annual retreats where members join together and plan what Umpqua will do differently in the upcoming year. They also serve as internal ambassadors, offering branch staff “Motivational Moments” as they tour and visit stores throughout the bank’s network.

Innovative To The Core

Umqua’s unique flavor of financial services is a direct reflection of its core values, and innovation is at the top of the list.

“Our tendency is to try things, fail fast, learn from what we’ve done, and then do more of what works,” Davis says. “We don’t focus-group a ton of things. We don’t go through lots of navel gazing about what we should be doing. We just do stuff.”

This commitment to innovation has been part of Umpqua’s culture since Davis first took over the CEO role at Umpqua. He didn’t see any risk in the approach. In fact, quite the opposite. He figured they had nothing to lose; they would either accomplish something big, bold and daring by embarking on a new, innovative course… or remain virtually irrelevant.

“I looked around in banking, and nothing was going on,” Davis recalls. “It was boring, to be honest. I figured, if we did anything, it can’t hurt us.”

“People say, ‘You took some chances,’ and I say, ‘No, there was no risk,'” Davis explains. “What we’re talking about is differentiating ourselves from all the other banks by treating people better than they’ve ever been treated. How do we stand out? Why would someone choose us instead of a big bank or credit union? It not going to be price.”

Ultimately it’s the changing dynamics involved with fluid situations that Davis seems to thrive on most. He loves the excitement of new ideas, and the energy that comes along with them.

“You can’t stay the same. Change is coming too rapidly,” Davis says. “Competition is getting tougher, so it will be more expensive to try and stay the same. In fact, you’ve got better chances of getting worse than you have of actually staying the same.”

“Uncertainty is a good thing,” he adds. “Uncertainty leads to opportunity.”


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