In a somewhat surprising move, USAA recently announced that it will be closing all but four of its financial centers. Why is this happening, and what does it mean for USAA customers?
In many ways, this is a return to USAA's origins. When I first started using USAA, many moons ago, the Internet was just really getting started and there were no smart phones. All transactions were handled over the phone and through the mail. (I think I finally threw out my old postage paid USAA deposit envelopes.)
Over the years, USAA has been an industry leader in figuring out how to use technology to provide more services without building more infrastructure. USAA was one of the first banks to build a viable banking model that didn't require actual banks, and it was a revolutionary thing. This suited the unique needs of their member base, who lived around the country and around the world. However, there were always a few complaints about the transactions that were a little easier to do face-to-face.
In 2009, USAA responded to member requests by opening its first "branch" in San Antonio, Texas, quickly followed by several more locations. Currently located at 21 locations around the country, USAA financial centers offer certain limited banking, insurance, investment and retirement functions, plus a convenient place to put USAA ATMs.
After 7 years of running financial centers, the results are in. Even with 21 locations, 85% of USAA members live outside the areas serviced by USAA financial centers. Only 2.5% of members use financial centers for transactions other than ATM use, which is a really small number. In analyzing the transactions that are occurring at financial centers, nearly everything could be done using the USAA Mobile App or an ATM, and the use of mobile banking continues to increase every year. Maintaining buildings and staff is expensive when you can accomplish the same results without those constant costs.
As a result, USAA has decided to close all but four financial centers. Services being offered at the financial centers will be replaced by the USAA Mobile App, the website, expanded ATM capabilities, and there is always the telephone. More complex transactions such as meeting with a Certified Financial Planner can use technology such as Skype. In addition, USAA will be adding additional ATMs in areas where financial centers are closing.
What does this mean for you? If you don't currently use a financial center, your experience will not change. If you do currently use a financial center, you will have to adapt to the old/new methods of transacting business with USAA, or move your business to another company.
I have very mixed feelings about this. On one hand, the numbers certainly support the logic. Plus, I've never used a USAA financial center, even when I have lived near one. My business with USAA has always been done over the telephone, through the website. I do have the USAA app, but I don't use it. Despite the fact that I'm using old-school technology, I've never felt like it was difficult to do business with USAA because I didn't have a branch.
On the other hand, this change assumes that members are capable and willing to utilize the USAA app, use the website, or use the telephone. There are many reasons why these solutions might be challenging. Not everyone has a smart phone, a computer, or internet service. Older members may not be comfortable using the USAA mobile app, and smart younger members may be uncomfortable with the security aspects of using the internet to perform certain banking transactions.
I'm curious what you think about this, and I'd love to relay your thoughts to my friends at USAA. Do you currently use a USAA financial center? Do you care that they are closing? Will you move any of your business elsewhere as a result of this change? Tell me your thoughts in the comments!