O Bee Credit Union’s pub-themed branches might just be sneaky genius

Tumwater-based O Bee Credit Union is opening a branch at the Point Ruston development whose décor may pose something of a challenge to the inattentive.

The branch, according to a credit-union press release, features local brewery beer taps and brass railings along the teller counter and windows. Wooden hop barrels, brick walls, hand-painted murals and historical images of a brewery, along with a chalkboard menu with “specials,” are design elements to give the feel of a tasting room.

Thus those headed for one of the development’s food-and-beverage establishments who pull open a door without noticing which one may be confused, and perhaps disappointed, when they march up to the counter to order a draft craft beer and are handed a checking account instead.

That raises two questions: Why go to all that trouble with something as utilitarian as a bank branch? And, why go to the trouble, in 2018, of opening a bank branch at all?

The answers to those questions, and there are some, go a long way toward explaining the trends that are shaping the banking industry today, as well as the competitive challenges it faces and how it’s positioned to meet them.

Question No. 1 is a little easier to answer. The beer motif is a nod to O Bee’s heritage as a credit union originally serving workers at the Olympia Brewery in Tumwater. The brewery itself shut down in 2003 (although there are plans to redevelop the property as a center for craft brewing and distilling).

Credit union, member-owned cooperatives, usually started by serving the employees of one specific company or facility. Those that never expanded their field of membership beyond a single employer folded or merged when the sponsoring business did.

O Bee expanded its field of membership to all Washington residents in 2002. That’s fairly common. BECU, the largest credit union in the state and one of the largest in the U.S., hasn’t been exclusive to Boeing employees and their families for years, hence the use of the acronym.

The interior decorating scheme also is evidence of a decades-long effort by the banking industry (we’re lumping credit unions in with banks for the moment) to make bank branches look like something other than a bank branches. Branches have been tricked up with living-room furniture, fireplaces and flat-screen TVs to dispel the conventional model. WaMu did away with teller counters and windows entirely, a design scrapped when JPMorgan Chase took it over.

Since everyone is pursuing the idea of bank branches that don’t look like branches, individual companies and organizations need some point of differentiation — hence the brew pub motif O Bee is trying.

That leads us to Question 2, which is why customers would care what a bank branch looks like, given how unlikely it is they’ll actually set foot in one.

Between ATMs, online and telephone banking and mobile-device financial-service payment systems, just about everything bank-related can be done without having to go into a bank. The industry itself has been moving customers out of branches ever since drive-through lanes meant they didn’t even have to get out of their cars.

Yet, the bank branch has shown remarkable resilience; banks may close some, but they also keep opening new locations.

“Having that physical presence is something that is still quite important to a lot of people,” says O Bee spokeswoman Martha Guilfoyle. “Even though we have a lot of members that don’t come in, when they come in they want to speak to a real person. We know that it resonates.”

The emphasis on O Bee’s heritage helps build a sense of community and provides an experience beyond going into a generic branch, something Millennials value, she adds.

The branch could prove to be an advantage when the next competitive challenge comes through, as it will. The banking industry has been through this before. Walmart was long suspected of having designs on retail banking. So was Microsoft. Federal regulators are now looking at granting what are called special-purpose national bank charters to online lenders and other fintech companies. Who knows what Amazon, Google, Facebook or some similar company might have in mind?

Whatever their competitive strengths, they won’t have a network of branches serving as daily reminders to anyone driving or walking past. They might be tempted to add some. Amazon has opened physical bookstores and bought a bricks-and-mortar grocery chain; credit card issuer Capital One has bank branches it calls cafes (complete with coffee bar).

Someone might even try marrying a bank branch with an actual brew pub. The tap handles at O Bee’s new branch don’t actually dispense beer, and O Bee doesn’t have a beer license — for now. Should it decide to stay ahead of the competition by adding those features, it does have a head start. There are likely a few folks in its membership base who remember how to make the stuff.

This story was originally published August 18, 2018 at 8:00 AM.