USAA brings the bank to UPS stores

Savings book with money protruding

The mighty USAA online bank this month essentially opened up 1,700 new deposit sites, thanks to a creative partnership with the UPS Store.

Does this move reinforce the theory that branch banking might not be on its last legs after all? Or are we simply witnessing the next step in the evolution of retail stores into bank branches?

When I was a kid, all gas stations were full service. Then a few maverick stations gave the pink slip to weird Carl with the 5 o'clock shadow and the oily hands and let customers pump their own gas.

Today, you'd be hard-pressed to find weird Carl at a gas station. Unless he's buying a lottery ticket.

The partnership between USAA and the UPS Store feels a little like the last days of weird Carl to me. It's practical, timely and convenient, three things that banking moves frequently are not.

Then again, USAA is not your typical bank.

Because it has historically catered to service members and their families stationed worldwide, USAA leap-frogged over the branch banking step and took its service virtual -- first via mail and phone, more recently via remote deposit capture programs like Deposit@Home and Deposit@Mobile.

But USAA realized that its members who are not comfortable with RDC remain at a disadvantage where deposits were concerned due to the inconvenience and the delay in funds availability for deposits sent by mail.

So the bank struck a deal with the UPS Store, which now accepts USAA deposits and sends them on their way electronically with all the speed of a branch bank.

USAA didn't need to make that play; it has one of the highest deposit growth rates at three times the industry average.

But if it can solve the one remaining hurdle for those not technically inclined and do so without building a single branch, heck -- mission accomplished!

Banking services in the retail environment are nothing new, of course.

For years, Walmart, 7-Eleven and other retailers have been creeping into quasi-banking just as banks have been placing branches and kiosks in supermarkets and shopping malls. Not to mention the tremendous synergy between retailers and banks in credit cards.

Were it not for the regulatory hurdles involved, the wall separating the two worlds would be rubble by now.

What makes USAA's move noteworthy?

Simple: It saw a customer need and met it without having to.

That's an industry trend I could get behind.

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