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IDEA EXCHANGE: USAA and UPS deliver 2,000+ “branches” E-mail

Walk-in remote capture set-up brings award-winning service


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Editor’s Note: A longstanding feature of ABA Banking Journal was “Idea Exchange.” Through several incarnations in print, it brought bankers stories of how institutions found solutions to common challenges; came up with innovations; and devised improved approaches to classical services. Idea Exchange will begin appearing periodically again on www.ababj.com . Watch Editor’s Report for future installments.
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By Steve Cocheo, executive editor and digital content mgr.
 
 
Typically when a reporter asks a banker how customers have taken to a new idea, the only guide is what’s reached the banker, and what the banker chooses to share. Not so with USAA Federal Savings Bank. For several years, the military-rooted thrift has set up its website to enable customer commentary on products and services.  And USAA isn’t shy about showing both the kudos and the warts.

The $55 billion-assets thrift has a winner in its partnership with The UPS Store, going by a sampling of the comments posted on the relevant web pages. 

Says retired Air Force customer “AFDEE”: “I love this program. I can deposit checks directly into my account free of charge using my bank card and the deposit shows up instantly. Thanks USAA!” 

Writes “Dub919”: “I’ve been using UPS Store deposits for a while now and it beats the heck out of a trip to the bank. The employees at my local store are very kind and helpful, and usually I’m in and out in 2 minutes or less.”

A year ago, after a pilot period, USAA, based in San Antonio, but serving member-customers worldwide, launched USAA Easy Deposit. The service, now available through 2,042 UPS Store franchise locations, permits customers to walk in and deposit checks of any size via remote capture terminals operated by a store employee. The terminals, from MagTek, connect to USAA’s processing center through each store’s POS system.

Easy Deposit expanded USAA’s remote capture suite of services. USAA pioneered consumer remote capture with its Deposit@Home service, launched in 2006, and continued that effort when it launched Deposit@Mobile three years later. The former relies on personal computers and scanners, and the latter on handhelds and iPads.
 
 
Partnering up for customer convenience
USAA is unusual among financial institutions, especially major retail banks, in that it has no branch network. Over the years it made extensive use of whatever was the state of the art in remote banking, serving military, military relatives, and other connected parties around the world. In spite of its size--the bank serves over 9 million members--what USAA is doing with UPS Store locations is a concept that banks of all sizes could consider doing with the right partner and a service like remote capture.

USAA Bank knows where its member-customers shop, by tracking spending patterns of their credit and debit cards. But when the thrift began seeking a way to broaden its domestic geographic reach through a partnership, it knew not every shopping destination would make a suitable location.  A fast-food restaurant, for instance, isn’t a place anyone would want to transact banking business.

After an initial review and after talking to customers about potential partners, the bank considered and approached companies with the right characteristics and struck an agreement with The UPS Store chain. The initial group of 1,900 stores was selected to match the bank’s U.S. customer footprint, says Jeff Easley, assistant vice-president. Over time, more stores have been added at customer request, Easley says. UPS Store has approximately 4,400 locations in the U.S.

While Easley says that USAA Bank’s regulators were informed of what the bank was doing at all stages, no branch approval or similar formal steps were necessary to network the UPS Stores with remote capture scanners. Easley points out that in principle there is no difference between putting a scanner in a store location for customers to use than having it in their home office, kitchen, or living room, depending on where they use their computers. And now, there’s even less of an issue, since Deposit@Mobile makes any spot on Earth with connectivity a potential location. The only significant differences between the earlier models and the storefront edition:

• Checks scanned at stores have their MICR lines “franked” by the scanner, to avoid rescans and other potential errors or frauds.  For this reason, store-deposited checks can be of any size, while size is restricted on the others as a matter of risk-tiering. (UPS Store staff, by the way, doesn’t have access to member information.)

• Checks can be scanned at stores by any customer. The earlier launches have been restricted in some ways for risk management purposes. Easley describes them as available to customers “with demonstrated financial responsibility.”
 
 
Success shows in volume
Easley says that Easy Deposit volume has grown, in a year, to an average of about 172,000 checks a month. This now represents about 20% of USAA Bank’s total remote capture volume by item. Easley notes that Deposit@Home volume has been falling, because of the convenience of using handheld devices anywhere.

Some customers particularly like being able to deposit  their checks remotely, but with a face-to-face interaction rather than doing business completely through technology.

“We want to provide them their channel of choice,” says Easley.

Easley says the UPS Store's stake in the partnership is gaining traffic and exposure for their locations, which feature a range of business services beyond simple shipping and freight. He adds that the traffic tends to be repeat traffic. Easley says no other remuneration is involved.
 
 
Recognition for innovation
USAA was one of 21 financial institutions honored by Celent this year in its Model Bank 2012 awards for Easy Deposit. Easley said the company is reviewing ways to expand its partnership with The UPS Store, perhaps adding other products to the mix. What those are he couldn’t say, nor would he tip his hand on what other partnerships the bank, having formed this one successfully, might form with other companies considered in the course of launching Easy Deposit.

One possibility: Finding a way of enabling customers to deposit cash may be on the “wishlist.”

USAA Bank’s online comment boards reveal a slice of the membership that would like that service, and Easley acknowledges that it is out there. He says USAA is “looking into it.”
 
 
[This article was posted on June 29, 2012, on the website of ABA Banking Journal, www.ababj.com.]      
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