USAA Puts a Human Touch in Remote Check Deposit

Like a mother who hides her child's vitamins in the cereal, USAA Federal Savings Bank is disguising new technology through old-fashioned, face-to-face service.

This fall, USAA began offering free check deposit services at nearly 30 United Parcel Service Inc. stores in San Antonio, where USAA is headquartered, and San Diego. USAA, whose main office is its only teller-supported branch, plans to expand the service to more than 1,700 UPS sites nationwide by spring.

On the surface, the service resembles one USAA offered during much of 2006 that let customers send check deposits by overnight courier from UPS sites. The key difference in this year's service is that the checks never leave the UPS store.

The UPS store employees scan the checks for USAA customers using the same technology the bank offers its customers to scan checks for deposit from their home computers or mobile phones. Though this arrangement would seem to add time and complexity to check deposits, many customers want that personal interaction, USAA said.

"They are aware that they could do this themselves," but not all customers want to, said Jeff Easley, USAA's deposits product manager. "This will fulfill their [need] to walk up and make a deposit transaction with a person," he said. "We still hear a number of members say that's how they prefer to do deposits with us."

Five years ago, USAA became the first customer of QuickPost, an overnight deposit service owned by the now defunct NetBank Inc. The QuickPost service was shut down in late 2006 after NetBank said it lost $3.3 million on the venture in just one quarter.

Though the service went away, the demand from customers did not.

"Most people see banks as a physical place," Easley said. "I see that as a need that hasn't changed a whole lot over the years. There are those who are willing to try the new channels, but there are still a number that prefer that deposit channel."

In the two months since the in-store service was begun, about 400 customers have deposited a total of $700,000 though UPS stores, which are independently owned and operated franchises of Mail Boxes Etc. Inc., a UPS company, Easley said.

The self-service versions of this service continue to gain traction among customers, said Easley.

Since USAA's Deposit@Home service was introduced in September 2006, customers have deposited more than 25.6 million checks, totaling more than $14.4 billion. About 2.8 million checks, or a total of $1.6 billion, have been deposited through USAA's Deposit@Mobile service, which was started in August 2009.

A segment of the bank's 7.8 million clients still want the ability to interact with someone face-to-face and to walk out of a store with a deposit receipt in hand, Easley said.

Craig Focardi, a senior research director at TowerGroup, said, "USAA is trying to offer all the services that a full-feature, brick-and-mortar bank would offer."

The in-store deposit service underscores the facts that a large segment of the population either is not completely comfortable with using the technology or is not equipped with the tools to do so, Focardi said.

"It may be lack of trust or accessibility," he said. "I think it's more the fact that scanning devices are not ubiquitous within consumer households. While the majority of consumers have online banking and like it, less of them have multifunction printers or dedicated scanners or iPhones for check scanning."

Gwenn Bezard, a research director at Aite Group who uses remote deposit capture technology on his mobile phone, said he thinks it is a matter of many consumers' personal technology not being up to snuff.

"I can tell you it's not necessarily working very well all the time," he said of mobile remote capture. "When you deposit a check, it's money. So there is a good level of concern for, 'Hey, am I going to get this money?' "

Analysts said the service could lead to greater technology adoption down the line as people see firsthand the ease with which deposits can be made electronically. "I don't think it contradicts the broad trend toward new technology adoption," Bezard said.