USAA Federal Savings Bank is shifting mobile banking into high gear by offering auto loans through customers' phones.

While most mobile financial services mimic banks' online bill-payment and account-management offerings, the San Antonio banking company may be the first to embrace handheld devices as a sales channel.

USAA has emerged as a mobile banking technology leader, largely because it recognizes that phones offer much more than just a small web browser.

"These devices are becoming so much more about data and how I interact … versus just a communication device that I just talk on," said Jeff Dennes, USAA's executive director of mobile.

USAA's mobile banking strategy is to take full advantage of the features built into the latest mobile devices. It no longer makes sense to simply adapt online banking features to a smaller screen, he said, when phones come with tools such as GPS location and an always-on data connection that most consumers' laptops lack.

"It allows you to do a lot more," Dennes said.

Mark Schwanhausser, a senior analyst at Javelin Strategy and Research of Pleasanton, Calif., said the key to a successful mobile banking strategy is taking advantage of these differences.

"You've got to show with mobile that it's different from what you can do online," Schwanhausser said. USAA's free auto loan feature "can really give the consumer a tool that they didn't have before."

USAA included the car loan feature, Auto Circle, in an update last week of its app for Apple Inc.'s iPhone.

A customer shopping for a car can enter the details of the desired model. USAA has relationships with many auto dealers, and the app will also display the price the financial company has already negotiated with them, if available, and can determine if the customer qualifies for financing through USAA. Auto Circle also has a companion website.

According to Dennes, in an ideal car-buying situation, a USAA customer would walk into an auto showroom, show a sales representative their iPhone with the price USAA has already negotiated and ask if the dealer can do any better.

Dennes said that the app makes it easier for customers to buy cars, and also makes it more likely that they will do so with a USAA loan. "This opens doors for us," he said.

Schwanhausser said the app is especially powerful because it holds a shopper's hand through the entire auto-buying process, and gives USAA a better chance of selling that loan.

He said that auto dealers want people to use the dealership's financing, even if other lenders offer better terms. By delivering loan information to a mobile device that people can take right into the salesroom, USAA can better compete for business.

"Here's a case where USAA can be in that room," Schwanhausser said. "They're now part of that bidding process. … They have a say."

USAA's update also includes a new tool to help people buy homes. The app locates nearby home listings and users can keep track of different properties by taking pictures or videos.

Dennes said that the mobile app is only part of a multichannel approach to holding the customer's hand through the lengthy homebuying process, and hopefully makes it more likely that they will use a USAA mortgage.

Though people buy homes and cars infrequently, Dennes said USAA's customer base, mostly people in the military and their families, move more often than the average person, and the updated app serves their specific needs.

Schwanhausser said that this makes such a service a good fit for USAA, but not for all banks.

"For a typical bank, I wouldn't put this at the top of the priority list," he said. "The typical bank should be prioritizing making their mobile banking as functional as possible."

USAA has been at the forefront of mobile banking. It was the first financial company to offer a mobile remote capture service, which it says has become very popular with customers.

Red Gillen, a senior banking analyst at the market research firm Celent, agreed that USAA has put a lot more into its mobile banking offering than a few software tweaks to the online version.

In particular, negotiating prices with car dealers goes well beyond most banks' mobile strategy.

"Other banks don't go to bat for their customers like USAA does," he said. "USAA has a very different focus than a traditional bank."

To find another example of a bank re-imagining mobile as a full-featured sales channel the way USAA has, Gillen said to look at Jibun Bank Corp. in Japan

Jibun, a 2008 joint venture between Mitsubishi UFJ Financial Group Inc. and the Japanese telecom company KDDI, offers a line of credit over mobile phones, something Gillen once considered far ahead of the mobile capabilities of banks based in the U.S.

"What we have in USAA is an example of Japanese-level mobile banking technology," he said. USAA "is right up there with one of the most advanced mobile banking functions in the world."

Most U.S. banks are wary that turning mobile into a full-featured sales channel could annoy customers, Gillen said.

"A lot of banks are just leery about … pushing this too hard," he said. "They want people to just adopt mobile."