Is this an upscale vest-pocket hotel? A fashionable retail shop? No, neither. It's a bank -- the first of 21 new financial centers that will open by year-end in Washington Mutual's hottest expansion market.

At a time when most banks are weaning customers away from their bricks-and-mortar branch network and toward electronic transactions, Washington Mutual has made an abrupt about-face in the direction of personal banking. After three major acquisitions in as many years, Kerry Killinger, CEO of what is now the country's ninth largest financial institution, started looking for a novel growth strategy to expand into new geographic markets.  The result -- Project Occasio, from the Latin meaning "favorable occasion" - is a radical retail initiative aimed at creating "an absolutely incredible customer experience," according to project director Karen Curtin,

How It All Started
About eighteen months ago, Curtin (who is also senior vice president of New Market Distribution) set out to rebuild the customer experience from the ground up. Hundreds of telephone interviews helped her to zero in on what consumers really want from their bank. The interviews also revealed that fully one in four interviewees currently was not getting what they wanted from any institution in Las Vegas, the fastest growing metropolitan area in the country.

Curtin hired the Dayton, Ohio-based Design Forum -- which had already helped the likes of Disney, Ann Taylor and KFC establish retail stores with a strong brand identity -- rather because they had never designed a bank than despite the fact. Together, through a series of in-person focus groups, they defined and refined the concept for Washington Mutual's new financial center stores.

The End Product
The newest bank in Las Vegas looks like a cross between Starbucks and Barney's. Curtin explains, "We tried to remove the physical barriers separating customers and bankers."

The traditional line of teller windows? Gone. Instead, the new branches feature freestanding teller towers strategically placed throughout the store, where bank staff and customers can stand more or less at right angles to one another. Each tower contains a hip-level cash drawer that delivers bills and coins to customers cashing a check or withdrawing funds from their account. Like city bus drivers, Washington Mutual tellers have neither cash on hand nor access to it, a deliberate deterrent to would-be robbers. In addition, the electronic devices automatically count and balance currency at the end of the day, eliminating much of the routine reporting required of tellers and branch managers in traditional bank branches.

Initial focus groups revealed an overwhelming preference for privacy, so each store contains plenty of discrete consultation space. "Our people are cross-trained to offer a variety of services," Curtin explains. "If they start talking with a customer about checking, they can easily move to a private place to continue the conversation."

Each branch will focus on personal loans, securities and insurance sales, checking and savings accounts and home loans. Part of the floor space is devoted to retail merchandise such as books, software and other items that can help customers become more financially savvy. And while their parents are busy conducting business, a play space keeps kids occupied with toys, books and videos aimed at exciting children about saving for the future.

As soon as they enter the store, customers are greeted by a concierge who either directs them to available bank staff or executes simple transactions for them on a hand-held device attached to a portable printer. For customers who prefer automated banking, a 24-hour banking vestibule contains an ATM, interactive touch-screen terminals and a personal computer with Internet access, open all the time. Customers can use the touch-screens to explore various what-if scenarios related to retirement planning, higher education expenses and investment alternatives. By pushing a button on the screen, the user can even summon live assistance on the spot.

If the wait for service outdistances complimentary coffee or tea, the concierge will provide customers with a pager that allows them to leave the bank for other business in the area and return when they can be served immediately.

Results Just In
Besides the Sahara Avenue store, Washington Mutual opened four additional financial centers on April 5, 2000. Another six are expected to begin operating by the middle of May. Curtin says that the 10 remaining branches scheduled to complete Washington Mutual's entry into the Las Vegas market are grassroots projects that will be completed before the end of year 2000.

By the end of their first week, after just three full days of business, the new branches had, on average, doubled the account openings of any other de novo bank in Washington Mutual history. Ray Linley, Regional Sales Assistant Manager, reports that the stores are adding customers at the rate of 20 new households per day, with cross sales of approximately four additional fee-producing services beyond the primary account.

A media campaign inviting consumers to "Rethink" their bank was launched earlier this year to support Washington Mutual's rollout of its financial center in Las Vegas. Curtin anticipates even more promising numbers to emerge with the launch of their direct mail campaign.

Greater Cost Efficiencies
Ironically, with all their high-tech/high-touch amenities, the new branches are significantly less expensive than traditional branches to get up and running. "We've wrung a great deal of expense out of the existing branch," says Curtin. "And I believe the opportunities [for cost reduction] are just beginning. We're deploying new technology in the third quarter that will enable customers to do 80-90 percent of their banking transactions on a portable device, like a Palm Pilot. That means we no longer have to build huge infrastructure to support large computer mainframes. It also gives us the flexibility to move the banker to the customer, and not the other way around."

She continues, "We're in the business for one reason: to serve the customer better than anyone else. This is a commodity business and we need to go above and beyond what's out there."

Washington Mutual is planning to roll out another series of financial centers in a second city, which is yet to be announced.

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