Q&A: Technology key to future, USAA CEO says
As president and CEO of USAA, Josue “Joe” Robles has been a tireless advocate of using technology to help improve services to the financial giant’s far-flung base of current, former and retired military personnel.
While Robles has been CEO, USAA has moved heavily into banking through mobile devices and other ways that allow its members to handle routine transactions themselves. He also led the biggest expansion of the group’s membership in its 88-year history last year by allowing any military veteran or their family member to join; membership had been restricted to active-duty or retired military personnel.
The retired major general told employees and business leaders attending the opening of USAA’s newest financial center in Colorado Springs last month that the organization “is so focused on technology because it is the future and we’ve got to be ahead, and not behind, the future.” The center, located in the group’s Briargate-area regional office, includes video-conference capabilities so members can talk to USAA employees about banking, insurance or investment needs.
Robles was 3 years old when his family left Puerto Rico for Ohio, and he grew up planning to become a doctor. But he married at 19, got a job in an auto-assembly plant and was drafted into the Army in 1965. He served in Korea and did a tour in Vietnam before returning to Ohio to attend Kent State University. After graduating, he served three years in Germany before earning a master’s degree in business administration at Indiana State University.
He would spend a year at an army officers’ college in Spain and as budget director for the Army. As deputy commander of a tank division at Fort Hood in Texas, his unit fought Saddam Hussein’s Republican Guard before Robles was made commanding general of the First Infantry Division. He decided to leave the Army in 1994 rather than move his autistic son again, and joined USAA as its chief financial officer. He became the group’s CEO in 2007.
Robles was interviewed while in Colorado Springs for the financial center’s opening.
Question: How did USAA avoid most of the effects of the recent financial crisis?
Answer: We did exceptionally well in 2008 and 2009, and 2009 was our best financial year ever. We have the world’s best customers and they stayed with us.
We added 423,000 new members in 2009. We truly have a work force to die for; they are the world’s best. They love our customers and are honored to serve military members and their families.
We are a very conservative company that is run with fiscal responsibility. We only spend what we make and we have very little debt; some would even say our debt is too low.
Our success is a combination of great customers and employees and fiscally responsible policies.
Q: USAA has been a leader in using technology; what new technologies are you working on now that members will see in coming years?
A: It is clear that the future unfolding before is in the smart phone and wireless devices. We are becoming more automated and have rolled out a few new products, including an iPhone app that allows members to take a picture of a check and then process the check automatically.
That is more efficient for us and more convenient for the customer. We also have mobile applications to move money between accounts.
All of that is needed because of the uniqueness of our military membership that is constantly traveling to far-flung places.
Q: Will this increasing automation affect personnel levels at USAA offices in Colorado Springs and elsewhere?
A: It won’t impact our employees in a major way. Even though we are doing more electronic transactions, our business volume is going through the roof, and a good amount of that volume wants to interact with a person.
We always will have our traditional telephone channel, but members are increasing doing business with us over the Internet — we had 350 million Internet sessions last year.
We will always need people. I would expect our work force to stay at between 21,000 and 22,000. We are focusing more on face-to-face financial advice and less transaction-oriented. Automation frees us up to do more face-to-face interaction with our clients.
Q: Will greater use of technology require more data center capacity and are you considering Colorado Springs as a location for future data center expansion?
A: The need for technology hardware and data center capacity is growing. Eventually there will be a need for another data center in addition to our existing centers in San Antonio and San Angelo (Texas), but it could be three or four years, or five or 10 years. We will put it where it makes the most sense for customers and business efficiency.
Q: What is USAA’s position on the financial-reform legislation now moving through Congress?
A: One of the dangers of the legislative process is trying to rush to get big things done.
I believe they are moving too fast with a very complicated bill that could have unintended consequences. We are absolutely in favor of financial reform, but the “Volcker Rule” (a provision in the legislation named for White House economic adviser and former Federal Reserve Chairman Paul Volcker that would curb risky trading and investing by banks) doesn’t make sense for a company like ours. We don’t take deposits and put them into exotic investments for our own account.
This rule would limit what we do in our insurance portfolio. It would raise the price of insurance and limit what we could offer to our members. We are being swept up in a drive to punish Wall Street firms.
Taking a broad brush and blanket punishment with new rules isn’t appropriate.
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Questions and answers have been edited for clarity and brevity.
Contact the writer at 636-0234.
