Crossroads - Spring 2011

territory, which is a broad geographic region. By using geocoding, we can pinpoint your exact location, and say, for example, “You really are more than three blocks from the coast, so you’re definitely not at risk from storm surge.” In this case, we can write more and better business for our membership and give them better rates. That’s a lot of fun as well.

Js: it’s great how being a branchless bank has given you this scope to innovate.

Gs: We’re really a branchless company. We’re a full financial services business. We have banking, we have investments, we have life insurance. Our big core products are auto insurance and financial advice. Everything is done pretty much through a centralized location.

If you go back 15 or 20 years, to the origins of USAA, we started out doing business by mail. Then, when 1-800 numbers came along in the late 1970s, we had to get our customer service reps to give instant help over the phone. Now mobile technology and the Internet have become so important to our business model because it’s essentially self-service—not only from home, but from any where in the world.

There are a couple of other things that we just rolled out. Let’s say you wanted to buy a new car. You can either prepare ahead of time for this, or you could just sho w up at a dealer. We have Auto Circle. You just visit that site, configure the car you want, and it tells you which dealers are in your area along with prices, and it quotes you then and there on the phone. You could be in another dealer’s office, for example, and you could show them a rival quote! We give you the ability to finance that car right there and then, and insure it, all in one location.

Home Circle is cool too. Using your ZIP code, you can find all the properties for sale in your area, pull up pictures of houses, along with all the other information. You could be right in front of the property as you do this, add it to your favorites and add your own pictures and notes. We’re doing a lot of things a lot easier for our membership, and that’s what really drives us at USAA: how can we make the user experience useful and simple for complex financial applications?

recruit heavily from universities in Texas and beyond. We have folks from MIT, Princeton, Carnegie Mellon, and the local universities: Texas, Texas Tech, every where you could imagine.

I hire any where between 75 and 125 college graduates every single year. One of the things we tell these people when we hire them is that we are hiring you to be a leader, not a programmer, so to speak. Yes, you’re going to be doing some programming, but we want our employees to be leaders, too, doing senior design work, software architecture work, and project management. We work with teams of consultants and international teams across the world, so we need these people to be the senior staff that leads these international teams.

Js: You started with a mail-in service, then a toll-free phone service, so in terms of existing customers, how have they reacted toward all the new technology you’re bringing out?

Js: moving on to the development of this software, can you tell us a bit about your software team?

Gs: We are a very large IT shop. Our workforce is extremely important to us. I

Gs: We think in the banking space we are one of the largest Internet banks out there. The reason I say that is that we have to be because we’re branchless. This is also the reason we’re seen as such an innovator in mobile banking. Our customers are eating this up! We count the transactions we do with our customers, whether that be a phone call or a balance check online, or an SMS text.

When you add all these up, 88 percent of all transactions are electronic. It’s amazing that 8 out of 10 transactions are electronic. So in terms of existing customers, Internet banking is a massive part of how they conduct business with us.

Js: sometimes the older generation can be difficult to convince that using the internet and mobile devices is safe and secure for banking. Do you think there is still a problem convincing this demographic it’s safe?

Gs: Generally, young people use this technology more, but most of our older demographics are using technology, too. I think your statement is true. One of our principles is that we give our members the ability to choose how they do business with us. We don’t force them to use the Internet, or SMS, or the phone.