Capital One is accelerating its move to DevOps, an application development model popularized by technology companies to gives engineers more control over the software they create. The bank, which manages more than 70 million credit card accounts, believes putting responsibility for code in the hands of developers will help it keep up with consumers’ preferences for the latest digital products and services.
“Winners in banking are going to be the ones that recognize that technology is really going to play a central role in how consumers want to bank in the future,” says CIO Rob Alexander, who has been leading Capital One’s IT department since 1998. “We’ve got to be great at building software.”
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Most banks are juggling creaky mainframe and other legacy technologies, as well as working to overcome bureaucracy that has stifled innovation. Plans to upgrade decades-old technology infrastructure often take a back seat to emerging digital imperatives that capture CEOs’ attention. CIOs often find themselves losing the budget battle with multiple stakeholders clamoring for money to throw at digital strategies.
Founded in 1988, Capital One has less technical debt and is free from the bureaucracy that paralyzes its rivals. Capital One’s executive management team realized early that it needed to think and move more like a technology company than a bank. It was quickly to embraced agile, open source, cloud and analytics.
In 2010, Alexander made changes to his engineering culture and vendor sourcing practices. Like all banks, Capital One had for years purchased commercial on-premises software packages, but Alexander said this wouldn’t suffice at a time when consumers began clamoring for online and mobile banking.
Capital One hired scores of engineers, whom Alexander co-located with line of business leaders, a departure from the business handoff stacks of software requirements and waiting for IT to complete them. These new teams, organized around digital products, began building software, releasing it early and updating it frequently.
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Alexander says agile was the precursor to Capital One’s DevOps technology operating model, which it calls “Engineering Excellence.” DevOps takes the agile ethos of building software rapidly but winnows the production funnel.
Previously, Capital One developers built software and turned it over to product management teams, which would test it for quality and iron out the bugs before pushing it into production. Now the product teams continuously build, test and deploy their software, using containers and microservices. They push and run the apps in Amazon Web Services’ public cloud, a move Alexander says helped his IT team focus on their core competencies of building digital products.
“Once you go upstream and have development teams truly own their code in production there is an accountability and a quality dynamic that happens that is a very powerful incentive,” Alexander says. “That’s the destination that we’re trying to get to across the board.”
Researchers are also warming to the notion of DevOps as an operational and cultural shift in IT. Gartner says that DevOps will evolve from a niche strategy employed by large cloud providers to a mainstream strategy employed by 25 percent of global 2000 organizations. However, Gartner says that changing the IT culture will prove difficult, particularly for organizations that haven’t yet moved to agile development.
DevOps helps with mobile, analytics development
While Alexander says that Capital One’s shift to DevOps is an ongoing process, the bank has consistently been among the first to implement new financial products, including a mobile banking and wallet applications, through digital channels. It was among the first banks to add the TouchID biometric identification feature to its mobile banking app, enabling users to access their accounts by placing a finger on the home button.
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In March, Capital One became the first bank to integrate with Amazon.com’s popular home Echo device, whose virtual assistant, Alexa, enables users to manage their finances with voice commands. The company last week added natural language search functionality that allows users to ask Alexa, for example, how much they spent at Starbucks in the past week. Alexander says this is indicative of Capital One’s strategy to meet customers in any digital channels they prefer to consume.
The DevOps move should also help with Capital One’s use of “fast data” to improve fraud detection and better serve customers. Alexander says the bank is using an array of technologies, including Kafka, Spark, Flank, Apex and Storm, to generate real-time notifications and insights.
These tools are also used to recommend the most appropriate card products to consumers as they are filling out applications online. Alexander says such tools can also help Capital One anticipate why consumers are calling into its call center, based on their previous transaction history.
“Banking needs to be real-time, banking needs to be digital, and banking needs to be enabled by data and intelligence in terms of understanding the customer and anticipating their needs,” Alexander says.
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