96.2% of USAA banking occurs over a computer or mobile device
Illustration by Jimmy Turrell for Fortune Magazine
By Deena Shanker
March 30, 2015

In 1922, 25 Army officers met in San Antonio and agreed to insure one another’s vehicles because nobody else would. Today their company, United Services Automobile Association, or USAA, is one of the largest banks in the country by assets, as well as one of the top mortgage brokers and auto insurers.

That’s all the more remarkable since just a small fraction of the population is allowed to sign up. The bank is open only to military members and their families, and it serves them with what Celent analyst Dan Latimore calls a “laser focus.”

It was reaching service members stationed abroad that led USAA to be among the first to offer real mobile banking services. And its member-owned model (it paid $1.6 billion in dividends to members last year) and devotion to its client base insulated it from the temptations that ruined many other financial services companies. The result: Since it loosened membership in 2009 to include anyone who had honorably served, membership has shot up 45%.’

Innovation nation

With only one full-service brick-and-mortar branch, USAA was an early leader in mobile banking, but it didn’t stop there. In the past five years alone, the company has filed 493 patents. It offers facial and voice-recognition logins, customer-service videochat, and mobile insurance-claim filing. In the works: a drone program, developed with the Federal Aviation Administration, that will allow USAA to assess damages after major catastrophic events, like last summer’s Colorado wildfires.

Near-fanatical customer focus

Serving service members is “baked into the core of who they are,” says Forrester analyst Megan Burns. That means sending some employees to mock boot camps, more mobile options, and exploring unusual products by popular demand, like ride-sharing insurance for former military members turned Uber drivers.

Happy employees, happy customers

USAA is a regular on Fortune’s Best Companies to Work For ranking (No. 33), as well as its Most Admired Companies list (No. 28). “We know that the member experience can’t be any better than our employee experience is internally,” says COO Carl Liebert. To wit, the company offers stress-relieving rooms, more than 20 hours a year in leadership training, and a gold-plated benefits plan. Plus, it’s hiring 1,600 work-from-home employees, making staff as mobile as members. 

This story is from the April 1, 2015 issue of Fortune.

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