You have two options. USB is more reliable; Network is convenient.
Print this checklist or keep it handy:
This is the easiest way to update if your receiver is connected to the internet. onkyo ht-r695 firmware update
Step 1: Check Current Version
Step 2: Perform the Update
If your receiver cannot connect to the internet, or the network update fails, you can update using a USB thumb drive.
Step 1: Download the File
Step 2: Prepare the USB Drive
Step 3: Install on Receiver
Pro tip: Before updating, write down your current speaker levels, crossover settings, and input assignments. A small number of users report settings being lost after update.