Sometimes the best ideas are the simplest ones. Ten years ago PSECU launched the Upost@home deposit service. It allows members to manually enter their deposits in the CU's online banking system for immediate credit, then mail them to the CU in a postage-paid envelope.

The service, launched in late 2001, was little publicized outside of PSECU's member base during the first two years. We first heard about it in late 2003 when a second credit union licensed the service. We gave it our highest honor, an OBR Best of the Web award (note 1), one of only five given during the post-bubble dark days of bank-tech innovation (2001 through 2004).

At the time, it seemed an almost crazy idea. An online/offline honor system for deposits. But the CU knew what it was doing. It limited the amount that could be deposited and which members were allowed to use the service.

Now the results speak for themselves (see annual totals in table below):

4.5 million items deposited worth $1.4 billion (avg. of $310 per check)
$74,000 in losses
= 0.0053% loss rate (0.5 basis points)
or 1.6 cents per item

Upost has turned into the least loss-prone method of accepting deposit, including the branch!

Another interesting data point: The CU is processing almost 50,000 Upost@home deposit items per month, about one per month per member enrolled in the service, a pace that's stayed remarkably consistent over time.

Bottom line: We've listed PSECU's Upost@home on our annual list of top online/mobile innovations of all time (it was ranked #24 of those invented in the past 10 years and #42 of all time). But in terms of "bang for your buck," it's probably in the top-5.

Source: PSECU, 5 July 2011

-----------------------------------

Notes:
1. The original article published in Online Banking Report (OBR #103) is reprinted in the Netbanker archives here.
2. The list of top innovators was published in OBR #188.

In what I hope is the beginning of a trend, Pennsylvania State Employees Credit Union (PSECU) is offering free FICO credit scores to its online banking customers. The CU says more than 200,000 members are eligible to receive free scores.

Although, Wamu and HSBC (note 1) both offer free scores for their respective credit card customers, PSECU is the first financial institution to offer scores to checking account customers within the online banking area.

There is no charge for the service, but members must enroll to participate. A new score will be posted online each month in the online banking area. Members also have the option to receive alerts when their scores are updated.

The service is powered by Fair Isaac's MyFICO service. According its press released today, the company is talking with other financial institutions about participating in the  Scores on Statements program. Currently, 1.5 million consumers have access to free credit scores through the service.

Bottom line: Without knowing the financial arrangements, it's impossible to estimate the ROI. But credit scores have real value to consumers and any financial institution providing them for free is likely to improve its standing. It's also possible that a free credit score service could be a profit center if fee-based credit report monitoring options are marketed to enrollees of the free service (note 2).  

PSECU page explaining the free FICO score program (link, 15 Jan 2008)

Notes:
1. Only HSBC's Sears Solution MasterCard includes the free scores. 

2. See our Online Banking Report on Credit Report Monitoring for more information on the opportunities for retail banks and credit unions.