Recognizing the growing use of mobile devices among consumers, and especially within its own customer base, USAA has become what is believed to be the first bank to offer a remote deposit capture (RDC) capability via a mobile device. During a late June webcast to customers, the San Antonio, Texas-based bank and integrated financial services firm announced that it would offer RDC capabilities via an application for Cupertino, Calif.-based Apple's iPhone. The mobile RDC capabilities went live on Aug. 11.
The app essentially is a mobile version of the deposit-a-check-at-home capability -- branded as Deposit@Home -- that USAA ($119 billion in owned and managed assets) already offers its customers, according to Jeff Dennes, the bank's executive director of mobile and money movement. For the mobile version, he explains, customers take pictures of their checks with the iPhone's built-in camera and submit the images for deposit.
USAA, which offers banking and other financial services products to the members of the U.S. armed services and their families, has a customer base that is both young and transient, as the military moves them around the country and the globe, Dennes notes. As such, he says, mobile access has become a key component for USAA in maintaining a high level of customer service.
Bob Meara, an Atlanta-based senior analyst in Celent's banking practice, says USAA is well positioned for mobile RDC. "Its membership is younger and more tech-savvy than most retail banks'," he remarks. "USAA has but a single branch for its more than 5 million members. It relies on self-service channels to serve its members, and mobile RDC is the best self-service deposit channel available to USAA."
USAA has placed a priority on mobile technology over the past few years. In December 2007, for instance, the company launched a mobile-optimized version of its Web site. Today nearly 11 percent of USAA's membership uses the company's mobile service offerings, according to USAA.
USAA's Dennes estimates that currently 40 percent of all traffic to the mobile site originates from users on iPhones. In the first quarter of 2008 it was even higher -- roughly 70 percent of traffic to the site was from iPhone users. "As we continued to see that trend and Apple opened up its App Store, it became apparent to us that the iPhone is the best experience and that if you create an app for the phone, it's that much better an experience," Dennes says.
A PRAGMATIC ALTERNATIVE
Celent's Meara calls USAA's mobile offerings a pragmatic alternative for the majority of branch transactions. "Why would the majority of consumers prefer to take a half hour or more to drive to a branch for a check deposit that could be made in a minute using a cell phone?" he poses. "The real news here is that an innovative bank is growing its deposit base at three times the industry average by spending a small fraction of what traditional retail banks have spent on branch building. It is a call to reconsider the role of branches for routine transactions."
USAA's iPhone RDC offering comes close on the heels of the May launch of USAA Mobile App, an iPhone application that enables users to manage their banking and other financial services products from their iPhones. Through the application, users can view their USAA bank, insurance and investment accounts and account histories, according to the financial institution. The app also allows users to pay bills, transfer funds, receive stock quotes, calculate monthly auto and home loan payments, and locate the nearest ATM.
USAA Mobile App is available for free download from Apple's iTunes store. The new remote deposit capture capability is delivered to users who have the existing USAA Mobile App via an automatic update, according to a USAA source.
USAA Mobile App was developed within the company's research and development lab, the bank's Dennes reports. "Because this was all new technology to us -- it was a different software development kit, etc. -- we handled it all as R&D work and took that work all the way to production, which is not something we would normally do," he relates.
Development work for the app started in October 2008, Dennes estimates. The app went live and was made available for download in mid-May. "It's not small," Dennes says of the development work. "When you're talking about an integrated financial services company, that [systems] integration is tough. But the app itself is pretty simple."