USAA’s Heather Cox is blurring the lines between business and technology

When Heather Cox joined USAA last year, its organization chart looked like almost any other bank's, with a great divide between technology and business expertise. In hiring Cox, the San Antonio bank, which has a longstanding reputation for being innovative, effectively agreed to restructure the entire company. She has plans to “levelize" the business and technology teams and morph them into “business technologists,” who are empathetic and understand that technology is the enabling function of their entire business — not the checking account or the insurance policy. “I don't want my business people thinking they need to go shop to the digital team to get digital prowess," said the bank's chief technology and digital officer. "Today they need to because that’s where our expertise is, but tomorrow I’d like those people embedded in the teams themselves.” The new model will make USAA look more like one of the technology “greats” — the usual suspects like Apple, Amazon, Facebook and Google — instead of an old bank or insurance company, Cox said. She's spent the last year graphing the new strategy: working with colleagues to translate all things IT-related into “simple business language” so both business and tech employees could articulate the mutual strategies and outcomes they want to deliver for customers and employees -- it's easy to get intimidated by technology’s complexity, Cox said -- and studying how startups in fintech, insurtech, healthtech and some regtech companies, in addition to the major tech firms, respond to their customers. In the last six months, her workforce of 10,000 has begun carrying out her vision. Her biggest challenge now is helping her company resist “the gravitational pull of business as usual.” “The concepts, capabilities and the way we actually get work done all have to be shifting at the same time," she said. "When you create a lot of change in an organization and you’re facing ambiguity because of that change, you revert back to what you know how to do... As much as people moan about how slow and cumbersome things are, they will go back to doing business as usual because they’ll know what’s coming, what they can manage and control.” But for Cox, employees' spirit and readiness to talk about the bank's future differently reinforces that the future is at her fingertips, and that 2017 was perhaps one of the best years of her professional career, she said. In August 2016, the news that Cox would up and leave Citi for USAA seemed sudden. She had been the CEO of Citi FinTech, the in-house startup that launched 10 months earlier at the fourth largest U.S. bank by assets to create mobile-first consumer solutions, for less than a year. It hadn’t even launched its first product at that point. Cox called her team there fabulous and a powerhouse she's been proud to watch from a distance. Walking away from that team, which she had built from scratch, as it was on the cusp of launching its first product was “the hardest thing she’d ever done,” she said. USAA has a reputation for digital innovation and customer service. For most of the time since it got its banking license in 1983 it has operated without much of a branch presence; customers would call the bank to make transactions. It built and expanded a physical branch network in 2009, though last year said it would close 17 of its 21 locations, citing customers’ preference for digital channels. But being largely branchless is why for so long USAA has been able to differentiate through its commitment to service and relationship building — not products, accounts or deposits — an attitude most household bank names have just adopted in the last two years. USAA also ranks highest only behind Capital One 360 in J.D. Power’s 2017 U.S. Direct Banking Satisfaction Study, published in June. It also has a Net Promoter Score — a number between -100 and 100 that measures customers’ willingness to return to a brand and recommend it — of 75. By comparison, SunTrust Financial has a NPS of 45, Citigroup 18, TD Bank 10, Goldman Sachs 5 and U.S. Bank 3. “This place was even more special than I anticipated it would be,” she said, recalling her first visit to the campus last year. “I walked away… and I was despondent. I’d had a great day but wondered if I had been on a fool’s errand for the last decade of my career, taking companies that didn't have customer focus in their DNA and trying to help them compete in the new world, where customer experience was emerging as something that matters.” Cox was good at doing that, she declared, and got better at bigger companies like Citi and Capital One, her other alma mater. But you can’t fake the commitment to customer care that USAA has, she said. Cox had been “a student of USAA” for more than a decade. In the early 2000s, it emerged as an unmatched leader in customer service. Cox, who was running contact centers at the time, was fascinated by its strategy. She had been studying it from afar for years, admiring what it stands for in the industry: commitment to serving the customer. She hoped Citi FinTech would find a way for the global bank to take care of the masses. But big banks today suffer from a real affliction, she said: they can't afford all their customers. They love high-value, high net worth customers, which often subsidize the lower-end accounts. “And yet, with the digital evolution and ability to build services from a technological point of view… if you build them the ‘right way’ you actually take those same services, apply them and do it for free for all your other customers.” USAA was built over 95 years. In the late 1990s it aggressively and appropriately adopted the software delivery practices of the time, but things changed aggressively again in the mid-2000s. The bank didn't change its delivery methodology, she Cox said. In the next year, she'll work hard to maintain that necessary level of discomfort that comes with real change; with the shift in thinking about how to design, build and deliver code for customer experiences differently than the way they do it today. “It’s going to look a lot closer to how technology companies today run," she said. "It’s not all the way there but it is a massive first step and as far as we can find — and as consultants around the globe are confirming for us — we’re the only ones who have taken to structuring ourselves this way."