The Grill: Capital One CIO Rob Alexander

Capital One's CIO talks about taking a conservative approach to finance, easing customer anxieties and using IT to boost efficiency in tough times.

Rob Alexander is the head of customer enterprise management at Capital One and is responsible for overseeing all of the financial services firm's technology activities, including an aggressive push to develop new online service capabilities.

How has the current financial crisis affected your business? Obviously, it's a challenging time for financial services firms. Lending companies in this kind of environment tend to be fairly cautious. That's the right approach, but we also want to position ourselves for the turnaround so we're able to be competitive as we start to come out of this cycle.

From a customer perspective, we see a real need to make sure we're delivering the best possible customer experience through a very stressful time. We continue to invest heavily in technology for the branch customer experience, our phone call-center customer experience and around the online channel.

Customers are stressed, and we want to be able to meet their needs as efficiently as possible -- to help customers manage their finances online so they're better able to weather that storm. We continue to see technology as a way to drive more efficiency in how we operate as a company.

Have the past few years taught you any lessons? We've always had a very conservative approach to how we underwrite in the marketplace. Sticking to our principles around how we lend to customers and really focusing on a strong balance sheet, capital and liquidity makes us well positioned to ride out a difficult economic environment. I think it's easy for financial services firms to get lured away from that in the boom times and to come to regret it in the down times.

Which technologies are currently causing the biggest impact on Capital One's business? I would say analytics. There's a demand [to] use information to make better decisions about marketing and [about] the products we develop to improve credit underwriting decisions and servicing decisions. That's a theme in the financial services industry; the innovation cycle time has sped up. Technology needs to support that because customer expectations have gone up dramatically, in large part driven by the Internet.

How can you assure customers that their online data is safe? I'm sure there will always be a set of customers who don't want to operate online because of those security concerns, but I think that will diminish over time.

Customers want to pay their bills online, they want to get their statements electronically -- and we're providing those capabilities. We're very sensitive to what happens when there's a data breach and the reputation impact -- or even potentially very serious financial impact -- it can have on a company.

We have [invested in] rigorous protection of our customers' information, including teams of people internally who are focused on how to defend against phishing attacks or any other kinds of electronic attacks against our site or network. Even with the news about security [breaches], there is a huge demand and uptake for online services.

Has the popularity of the iPhone and other mobile devices put new IT demands on your business? Yes, it has. There is no question that mobile banking solutions are becoming a table-stakes thing. There are a lot of different ways to deliver mobile solutions, and I think we have some pretty cool things we're working on that have the opportunity to create some differentiation there.

Mobile is going to be such an important platform for us. It's a ubiquitous platform today, but it's driven by generational changes. The comfort that younger generations have today with doing transactions over mobile devices is just going to make this pressure grow over time for us.

How is Capital One responding to new storage demands created by the explosion of data? Disaster recovery and the need to do data replication has really driven changes in our need for data storage. For example, we recently put in place a new online servicing platform that has dramatically different storage needs than the previous system. We have different data-retention requirements for different types of data, and we're tackling this head-on. We have an initiative internally where we're trying to look at our whole storage footprint and understand how we can really optimize that -- to reduce cost and be more efficient.

How important is IT innovation to your business? Innovation for us is critical. For financial services, our product is IT, in a way. It's an intangible product that we deliver through IT solutions. Yes, there's a whole relationship and personal component part of it, particularly in branch and commercial banking. But a lot of what we do is all about technology.

Recently, I was on my California tour where I visited a bunch of major technology players. Essentially, with each of them I said, "Tell me about your strategy, where you're going and some of your developments."

At Capital One, we have an advanced technology group whose job is to look at some of these cutting-edge technologies [and] pilot some of those things so we can introduce ideas to the business.

How will Capital One interact with customers in a Web 2.0 world? When it comes to Web 2.0 technologies and things like Facebook and new collaboration tools, we're really excited about those in terms of helping to spur innovation within Capital One about things we can offer to customers online, and also [in terms of] the opportunity to create some breakthroughs in productivity and the connectedness of people to the enterprise.

It's an important opportunity for us, and we're pushing hard to determine how we can deploy some of these technologies internally.

Copyright © 2008 IDG Communications, Inc.

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