Like mobile banking? Thank a veteran

USAA pioneered mobile banking

Monday is Veterans Day, when the nation pays tribute to those who served. You’ve heard these men and women praised in many ways across history, but I bet you never heard anyone thank them for revolutionizing mobile banking. They did, owing to their unique circumstances and because of the unusual bank that targets them: USAA.

For most, depositing a check via smartphone is a mere convenience, saving a trip to the bank. But for military families spread around the world, it’s much more.

“It’s a real lifesaver, actually,” says Scott Beggs.

He’s stationed in Germany with his wife, an Air Force captain. Without mobile, they’d have to use mail, an option he dreads as both inconvenient and insecure.

“The possibility of the check getting lost is high,” Beggs explains. “The possibility of it getting tampered with or stolen is high, not to mention the three week to four week mail time.”

Many using smart phone deposit now take for granted the consumer technology that debuted in 2009. But that rollout would’ve been much later if not for military families. Frequently moving and often stationed abroad or otherwise far from bank branches, many are USAA customers.

Banks of USAA’s size are not known for technological innovation. But its special clientele, along with its status as a nearly branchless direct bank, spurred it to become the first to offer consumers smart phone check deposit.

It didn’t have to create all the technology from scratch. Banks and businesses exchanged scanned checks for years, but regular customers were left out.

“Nobody trusted their consumer enough to say, ‘Hey, we’re actually gonna extend remote deposit capture out to the consumer market,’” says USAA assistant vice president Neff Hudson.

USAA did and saw success. Other banks have since fallen in line and the feature’s now increasingly common at banks large and small.

The company places an emphasis on innovation driven by the unusual needs of the military community. At its San Antonio, Texas headquarters, a basement lab has things you’d expect an insurance and banking company to be playing around with (smart phones and tablets) but also many you wouldn’t (drones, 3-D printers). Gadgets are strewn everywhere, like Transformers in a kid’s bedroom. A current project aims to develop better voice recognition for disabled Iraq and Afghanistan vets who can’t easily use touchscreens.

USAA engineers in that lab began work on mobile deposit at a time when banks and many consumers were hesitant to roll it out. There were widespread worries about the potential for fraud and security breaches.

“It is convenient, but there are some risks,” says Bankrate.com senior analyst Sheyna Steiner.

But military families wanted it and got it. (That includes my own. Both my parents served in the military and we have been USAA clients at various times over the years.)

USAA rolled out mobile deposits for its own good, of course. But the impact went beyond the military community. And it all goes back to demand from military families, whose needs ultimately drove the entire banking industry to step up mobile banking innovation. So if you’re a fan of depositing checks with your phone, that’s one more reason to thank those who served on Veterans Day.

Mark Garrison: For most, depositing a check via smartphone is a mere convenience, saving a trip to the bank. But for military families spread around the world, it’s much more.

Scott Beggs: It’s a real lifesaver, actually.

Scott Beggs is stationed in Germany, where his wife is an Air Force captain. Without mobile, they’d have to use mail.

Beggs: The possibility of the check getting lost is high. The possibility of it getting tampered with or stolen is high, not to mention the three week to four week mail time.

Those of us using smartphone deposit now take for granted the consumer technology that debuted in 2009. But that rollout would’ve come much later, if ever, if not for military families and the very unusual bank that targets them: USAA. Engineer Maland (MAY-land) Mortensen shows me around the company’s cluttered Texas lab, where it pioneered mobile deposit.

Yes, he said drones. Also 3-D printers, all strewn about like Transformers in a kid’s bedroom. They’re now working on better voice recognition for disabled Iraq and Afghanistan vets who can’t easily use touchscreens. As for mobile deposits, USAA didn’t have to invent everything here. Banks and businesses exchanged scanned checks for years, but assistant VP Neff Hudson says regular customers were left out.

Neff Hudson: Nobody trusted their consumer enough to say, hey, we’re actually gonna extend remote deposit capture out to the consumer market.

USAA became the first bank to do so. Others have since fallen in line and the feature’s increasingly common. Sheyna (SHAY-nuh) Steiner’s a senior analyst at Bankrate.

Sheyna Steiner: It is convenient, but there are some risks.

Among them, potential for fraud and security breaches, which is why banks and many consumers were hesitant. But military families demanded it and got it. USAA rolled out mobile deposits for its own good. But the impact went beyond the military community. So if you’re a fan of depositing checks with your phone, that’s one more reason to thank those who served on Veterans Day. I'm Mark Garrison, for Marketplace.

About the author

Mark Garrison is a reporter and substitute host for Marketplace, based in New York.

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