Q&A: Best known for ads touting its credit cards as weapons for consumers to have in their wallets, Capital One has its own secret weapon: technology.
is one of the nation's largest banks. It started as a credit card company, really as a startup in the late 1980s. Its founder, Richard Fairbank, is still its CEO today. Fairbank's idea was to build a better financial services company by using information and data to make better decisions and build better products and services for customers—making Capital One an early "big data" company. The company launched around the notion of an information-based strategy, which in that era was a pretty novel concept.
In this sweeping interview, Rob Alexander, CIO of Capital One, tells how the company emerged as a forward-looking, developer-centric financial services institution. As one of the nation's leading credit card issuers, Capital One is a leader in consumer financial services, but also has a sizeable commercial banking business.
What role does technology play in Capital One's strategy to win in the market?
We're in a business where two of our biggest products are software and data—intangible products. Technology plays a really central role in our strategy as a company, and that's become even more the case with the digital revolution that is happening around us. More and more customers are expecting to interact with their banking products and services through additional channels, whether that's predominantly mobile, online banking, ATMs, wearables or whatever. So we feel like it's absolutely critical if we're going to be a winner in this market, we have to deliver really well-designed solutions for our customers through software and great data capabilities.
What is driving this transformation?
We have a strategic imperative for a pretty dramatic transformation of our technology capabilities as a company. And this is a transition from being a company with an IT organization or an IT shop to really being a technology-led company.
The hardest part of that transition is really a talent transformation. It's going from an organization where as a typical bank IT shop, we would acquire third-party solutions and bring them in and integrate them. But it's a very different model when you are actually building your own technology solutions. It requires a different talent base, and it requires a different mindset and an entirely different operating model to do that.
That is a big shift that many financial institutions are going to find challenging to make. So we're intent on implementing a technology operating model for how we develop our technology solutions that is based on how leading technology companies operate.
For us, that's about building solutions in the cloud; we're an open-source first development shop. We build a lot of open-source software that we contribute back to the open-source community. We even launched our own
We build our solutions in an API-based microservices architectural approach, which is a more modern way of building software. We operate with an Agile
, iterative approach to building software. And we are very focused on implementing a DevOps model of continuous integration and continuous deployment of software so that we can iterate with the speed that's demanded by the marketplace.
This technology transformation has been accompanied by a revolution in how we think about design as well. Design is an important complement to the ability to build great software. If you don't have a great design ethos and capability, then I think you're missing an important part of the equation. So we focus on building a great design organization.
We went out and acquired a design consulting firm. We are very much focused on design thinking and a human-centered design approach to how customers use banking products and how we can improve the end-to-end experience for customers.
What else have you done to help change the game for your developers and customers?
Some of the other things we've been doing recently is we launched our Capital One Wallet mobile app. We recently launched an open API platform for developers—a platform we call DevExchange
, which allows developers to start to consume some of the APIs that we developed. And we believe that has the potential to create a whole ecosystem of third parties that can build on the technologies that we've launched.
Recently, we launched an Alexa skill on Amazon Echo that allows customers to service their credit cards through that channel. We want to help consumers do banking where they want to do banking. Banking is becoming more integrated into consumers' lives and it will be channels like Alexa and other ways consumers want to interact that will be important channels for banking in the future.
Do you feel like Capital One is unique in this approach?
Yes, I believe we're unique and I believe we're unique relative to other large financial services institutions. I think the world of FinTech [financial technology], when you look at the startups in this space, they'll employ a lot of the technology operating model that I'm talking about—they'll build their solutions in the cloud, they'll leverage open-source technology, they'll build software in more modern ways. Not many big banks are doing it. And not many big banks are doing it because they are shackled to legacy technologies and they struggle to break away from that. And they struggle to break away from conventional ways of thinking and they struggle to break away from conventional talent.