How USAA Continues To Set An Industry Standard For Data Driven Leadership

No wonder NFL legend Rob Gronkowski (Gronk!) wants so hard to become a USAA member. USAA has long been a leader in providing financial services to its members. USAA has also demonstrated a long history of being home to some of the best data and analytics leaders in the profession. These data and analytics leaders have gone on to hold data and analytics leadership roles at companies including Wells Fargo, Nationwide, Invesco, Envestnet, General Motors, Microsoft, and Facebook.

Founded in 1922 by a group of military officers, USAA is among the leading providers of insurance, banking and investment and retirement solutions to nearly 13 million members of the U.S. military, veterans who have honorably served, and their families. Headquartered in San Antonio, Texas, USAA has offices in eight U.S. cities and three overseas locations and employs more than 37,000 people worldwide. Each year, the company contributes to national and local nonprofits in support of military families and communities where employees live and work.

Ramnik Bajaj serves as the Chief Data and Analytics Officer of USAA, a position that he assumed in April 2021. In his role as CDAO at USAA, Bajaj is responsible for setting the vision for how data is managed, organized and the data environment architected, as well as the use of data for operational, analytic and AI purposes. USAA has a long tradition of excellence in the application of data and analytics on behalf of its members. Bajaj notes, “The strategic importance of data is well recognized within USAA. It is a board level topic for us.” He outlines his organizational mandate, comprised of two corporate priorities:

1. Achieving a common data and analytics foundation for USAA, including establishment of a unified data environment and common toolset, and setting up the rails for data to be integrated, well organized, easy to find, access, and use with full governance and protection.
2. Working with businesses and data and analytics leaders across USAA to bring the power of data and analytics to bear in everything USAA does to serve its members.

USAA’s primary businesses are P&C insurance, life insurance, and banking. The nature of these businesses require data and analytics to be at the core of USAA’s business operations. Bajaj notes, “Our actuaries were ‘data scientists’ before the term was coined – and continue to be. Data, analytics, modeling, data science, and now AI/ML, provide the foundation for actuarial operations, risk analysis, underwriting, claims processing and many other core business functions – as well as for providing the best experience for USAA members.”

USAA manages data as a strategic business asset of the company. Bajaj explains, “We view the data that we collect and generate, as well as each report, model and analytic we design and build, and the output of each analytic as an asset.” Good data governance and data management practices are of vital importance to ensure that USAA is always protecting sensitive data, respecting privacy of its members, and managing data risk. Bajaj comments, “Making sure we can trust our data and be confident in the decisions we make using our data is essential.” USAA has processes in place to inventory the data assets of the company, use structured approaches to manage their lifecycle, protect the data assets and govern their use.

USAA has long recognized the necessity of building a data-driven business culture. Bajaj observes “Data driven culture has traditionally been about using data for decision making – and that continues to be an important aspect. We must be deliberate in our decision making – not just verify our intuitions with data but form our intuitions after looking at what the data is telling us.” He elaborates on the ways USAA has built and continues to nurture a strong data culture, noting that to be able to draw conclusions from data, the pre-requisite is having rich data, knowing how to find it, being able to understand the data, making it easy to access with governance, and ensuring that the data is reliable. USAA calls this “data being driven.” He continues, “And then there is us ‘being data driven’. Being data driven has taken on entirely new dimensions, well beyond decision making and marketing with data, to the realm of designing with data, operating with data, servicing with data, and innovating with data.”

Bajaj explains that designing with data has been well ingrained in UI/UX teams and is now being extended to product design. Test and learn is a valuable technique for every aspect of designing products and experiences at USAA. Operating with data is well established in domains such as call center volume forecasting, P&C loss estimation, and financial planning. Bajaj adds, “Our literacy efforts are about getting decisions around business, product and feature, strategy, employee experience, productivity and effectiveness to all be data driven.” Looking across the organization, USAA is undertaking a wide range of ongoing data and analytics initiatives beyond the examples discussed here, including:

• Continuous efforts to make data more reliable, easy to find, understand, and use.
• Cloud based modernization of the USAA data environment to achieve these objectives.
• Focusing on the analytic user’s experience – integrating data with analytic tool sets.

Additional ways that USAA is leveraging data include servicing with data. USAA is working to deploy data and analytics into each interaction to provide the best experience and advice. In addition to enabling greater personalization, USAA also uses data to improve the ease of member interactions, which requires integrated channel, member, and product data. USAA is also using data to drive innovation within the business. For example, USAA has rolled out entirely new products that are based on data and analytics, such as the company’s safe driving auto insurance product, ‘SafePilot,’ and ‘pay as you drive’ product. USAA continues to invest in claims automation, using advanced computer vision AI models to bring significant automation to property loss assessments, especially in catastrophe scenarios.

A very hot topic within leading companies these days is identifying opportunities for innovation using Artificial Intelligence (AI). Bajaj explains, “One of our focus areas is AI acceleration, by expanding the skills and capacity, improving tools, increasing automation through MLOps, and creating more reuse in AI so we can embed AI use in many more of our processes and products. As I’m sure is the case with many of our peers, we are also looking at the power and potential of generative AI to add to our business and our members’ experience. We see a wealth of opportunity – of course we will proceed with diligence and caution.” USAA foresees that differentiation in generative AI will come from its adoption and integration into experiences, and more importantly, from incorporating proprietary data that is well organized and integrated for model training and tuning.

USAA believes that investments in data and analytics must yield commensurate business value. Bajaj observes, “We are very measurement oriented – for how we are doing, our progress and our service.” He notes that several data maturity metrics are part of the way that USAA measures its performance and the success of its executives. Bajaj adds, “That’s how much importance we give to building a strong data foundation for USAA.” USAA employs a project ROI approach to measure initiatives such as AI models, analytic solutions, personalization, and marketing initiatives. Bajaj notes, “We are looking to get more sophisticated to measure the value of infrastructure projects.”

Bajaj sums up the philosophy of USAA, “Our members expect and deserve integrated digital experiences across products, faster underwriting decisions, frictionless claims processing and timely and holistic advice – to name just a few of the experiences enabled by the power of data and analytics. As a data & analytics function, we are always looking for ways to use data to improve our member experience, improve our products, and improve our business operations.” With this outlook, it is clear why USAA continues to set an industry standard for data driven leadership. Keep trying, Gronk!

Randy Bean is the author of Fail Fast, Learn Faster: Lessons in Data-Driven Leadership in an Age of Disruption, Big Data, and AI, and a contributor to Harvard Business Review, Forbes, and MIT Sloan Management Review. He was Founder and CEO of NewVantage Partners, a strategic advisory firm which he founded in 2001 and which was acquired by Paris-based global consultancy Wavestone. He now serves as Innovation Fellow, Data Strategy at Wavestone. You can follow him on LinkedIn.