Podcast: USAA's branchless system for military pushes mobile banking technology forward
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News & Intro
As far as the news this week, the industry is still getting back into the swing of things so there isn't a whole lot out there, but there were a couple of items relating to money transfer services that I want to go over because sometimes I think this is an area that often gets overlooked in the industry. Moneygram and Philippines based mobile wallet, GCash have announced that customers worldwide can now send money transfers to over 10 million Gcash mobile wallets in the country at any time.
And I think that's one thing to look out for and these announcements. While we traditionally think of money transfers as a consumer picking up cash from an agent. The mobile phone is changing that even in less developed countries, but it just so happens that in those countries consumers there rely on mobile phones to pay much more than we do say in the US, Canada and the UK. M-Pesa is probably the most successful mobile payments and mobile banking platform in the world and it started in Africa. The idea of sending a mobile money transfer electronically between MPesa accounts is as common as you and I using a plastic card inside our favorite store and I think you're going to see more of these money grant type partnerships in the future because mobile is all about convenience and that's one of the primary reasons for digital transfer services.
Will: I am here with my guest this week and that is Phil Leininger. He is from USAA Bank and he is the General Manager for Omnichannel Sales and Services there. Phil is going to be giving a keynote address at next week's Bank Customer Experience Summit in Chicago. Phil's keynote is on Friday, September 14th at 8:30 in the main ballroom at the Sofitel hotel. That's near the Magnificent Mile in Chicago. If you're listening to the podcast this coming Friday, the 7th, you can still get into Bank Customer Experience Summit, there is still time to register. Phil, thanks for joining me today. How are you doing?
Phil: I'm absolutely great. Will, thanks a lot for asking.
Will: USAA has had this reputation for being on the cutting edge of mobile features because of the unique nature of the bank in terms of servicing the military and their families worldwide. I know the bank was one of the first to do mobile deposit capture. There have been innovations with biometric stuff and along those lines, what do you think have been the biggest factors in the past to adding new features to the app for the bank?
Phil: Yeah, that's a great question. Actually, I'll go back to the way you started that question and it's being a member owned company that really serves a group of members that work for us tirelessly across the globe. 24/7. We pride ourselves truly on being fanatical about our members and fanatical about their needs. The other thing I'd tell you is that our members are not shy because we are a member owned organization. They reach out and constantly participate in us getting better. So all of those things I think combined to create a unique mixture of innovation, and us wanting to solve real world challenges that our members have. You can imagine someone that's a on an aircraft carrier in the Pacific Ocean, doesn't have a lot of bandwidth to have a app.
You can also imagine that this group of members are very technologically advanced and using things like biometrics everyday in their jobs, so it's almost an expectation of them that we use those things in our solutions. Finally, when you think about mobile, for us being a direct and digital bank, mobile is not a nicety or another platform that we decided to try out. It's essential functionality for us in our members. Our members carry their mobile device around with them in their pocket when we're on that, that means that they're carrying their bank around in their pocket and so that really creates a combination of what we've done to try to stay at the forefront. It's not so that we can beat the competition, it's so that we can be there for our members whenever they need us. Wherever they need us.
Will: You mentioned how there's constant communication there between yourself and the members and what does that look like? I'm assuming, is that something that they can access to the app that they can access online? Can you take me through exactly what that looks like for the bank?
Phil: We interact with our members, we've got about a 9 million banking members, 3 million of those that we really considered to be our primary members that use us as their day to day bank and we interact with them over the course of a given year. Well north of 1.5 billion times. And so it's really a layered strategy when you talk about those interactions. So some of it is absolutely self service where our members can pop on anytime they want and they can check out their account, checkout balances, pay a bill, etc. The second piece that we do is we look for on top of that have fairly robust alerts and notification strategy where we work with our members to set limits, targets, and alerts so that we can communicate them, when something happens.
They're very Busy and so we don't always want it to be something where they have to come and seek us out. The third thing I'd say on that from a bank strategies that all of those things are underwritten by 24/7 customer service or what we call member service, where if they need it, they can always reach out and talk to someone. Sometimes that's chat. Sometimes it's on the phone, but as you know, we don't have branches and so our branch bankers sit in contact centers and really take their jobs seriously to be there whenever our members need them. If you can imagine someone being deployed overseas is often at odd hours of the day. So it's really a multilayered strategy that starts with the app and the website is girded then by the alerts and notifications that we do.
Will: You probably have a different perspective than others. Again, given the unique nature of USAA, but at this point when you're looking at mobile banking in general and the features that are out there, what do you think will make mobile banking more valuable at this point? What more can banks add in general to make it a more attractive channel for the customers that are using it on a daily basis?
Phil: Yeah, that's a great question. And one that we asked ourselves all the time as we're working on prioritizing different features and different things for our app. And I'm sure that's the same across the board with everyone that's in digital and direct banking. What I'd say is that the best thing you can do at this point to understand what can make your app more valuable is to actually ask your customers. One of the things we've done over the last 10 years is made it a really consistent practice to go out and ask them what they need and then take those things and start to develop minimum viable prototypes and get them out in front of members where they can touch and feel them and in a very rapid development environment so they can touch and feel them and see if those are the kinds of things that are actually going to add value.
One of the things that's a very consistent theme that our members tell us time and time again that I think really has applicability in the mobile space is that they tell us that they want us to know them, understand their situation, and then remember all of the things that they've told us. When you think about that and you think about how that aligns with where so many, not just banks with so many mobile companies are going with personalization. I think it aligns perfectly, right? So know who I am, have things that are designed specifically for me, understand what I need. Make sure that the product services advice that you're serving up is the product services advice that I need. Then ultimately remember what I've told you, there's nothing more frustrating when I've gone in and done a transaction or had a conversation and I can't find a record of it. I don't know that the bank or the company knows what I've told them. And so these interactions that we have with our members or our customers should continually feed off of each other and get smarter and smarter. And I think we've talked about doing that for, I don't know, the last 15 years I've been in financial services, but technology is just getting to a place with machine learning, artificial intelligence and some of the storage capabilities we have now that's allowing us to make good on that promise.
Will: So you mentioned this a little bit in terms of machine learning, AI and things of that nature. One last question here before I let you go. What are some of the trends that banks should be keeping tabs on as we prep for a new year? There's a lot of noise, obviously we just mentioned about AI. People are talking about blockchain, other kinds of mobile developments, but what do you think will be the key things to to keep a focus on going forward?
Phil: We've got our eyes on a lot of things here. One of the ones that it's really interesting to me right now is cash. So five years ago, a lot of predictions were made that by 2020 cash was going to be gone. I don't think that's going to be the case. And in fact, one of the things that I'd point to on that is that, I don't know if you know this, you probably do that in, in the industry, but maybe all the listeners don't. Amazon has 15,000 places across the country that you can actually deposit cash into an Amazon account. And so when you think about that, when you think about the fact that companies like Amazon have figured out a way to collect cash so that people that are under banked or un-banked can still use their products and services.
I just think that's an interesting trend because what we're seeing is we're seeing the blending between the technology companies and historically depositing cash was looked at as absolutely a banking transaction. And so I think that's one big trend that we have to keep our eye on and just understand what's happening there. Coinstar, Green Dots, Amazon Cash, et cetera. There's a lot of that. The second one that I'm particularly watching, and I'm a huge fan of artificial intelligence and all it can offer. I'm very interested on what artificial intelligence does to customer and member loyalty. It's a lot easier to unfriend someone on Facebook than it is to call someone and end the relationship. So, the more and more we get into artificial intelligence, what I, what I'm nervous about is that we're gonna lose loyalty and make it easier for our members to "breakup with us".
So that's one trend that I think we need to keep our eye on. The third one is really around the digitization of our membership and the digitization of our customers as they really start to use social media more and more as a means to communicate. We've all seen it, right? Or whatever generation you are, the next generation is doing something that doesn't make sense to parents. I look at my kids and I say, wow, Snapchat, that doesn't make sense to me, but it makes sense to them and so I think we need to be looking at those trends and understanding the digitization of the next generation and where they're going and what that means for currency. Whether it's cryptocurrency, what it means for lending, whether it's peer to peer, small business, social lending. I just think there's some interesting trends that our kids are going to teach us if we, if we look the right way.
Will: Thanks for taking the time this week. this is all fascinating stuff. It's just kinda funny covering the industry and USAA has always been kind of the top in terms of innovations and mobile banking, so it's good to have you want and talk about these things and I look forward to catching up next week in Chicago.
Phil: Yeah, look forward to it too. Will, thank you.
Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.