Want unlimited access to top ideas and insights?
Jonathan Crane strives to stay at the forefront of digital innovation. To achieve that goal, Crane — senior vice president and head of consumer banking, securities and enterprise technology at Axos Bank — tries to sidestep what he considers a huge tech misstep in banking.
"The biggest mistake banks make is treating digital transformation as a cost center or a modernization exercise," said Crane, a 13-year employee of Axos. "We've learned to tie every investment to a business outcome upfront. If you can't articulate how it drives revenue, reduces cost or improves speed, you probably should question why you're doing it."
"Technology teams should be accountable to business metrics, not just delivery milestones," he added.
Viewing digital innovation through that lens, Crane has delivered more than 100 custom apps to automate processes, boost efficiency and eliminate "technical debt." Tech debt refers to the long-term cost of making quick fixes in coding or system design instead of embracing an approach that helps avoid pesky bugs, complex updates or other problems later on.
Furthermore, Crane is leading a three-year effort that includes:
- Launching next-generation mobile banking capabilities.
- Introducing real-time payments through FedNow, RTP and Zelle.
- Integrating cryptocurrency capabilities and crypto-secured lending.
- Expanding the bank's virtual card offerings.
To enable digital innovation at Axos, Crane said, the bank rapidly tests and launches elements such as employing AI to automatically handle a task from beginning to end without human intervention, known in techspeak as straight-through processing.
In fostering digital innovation, Crane spreads work among business units and highly skilled "power users" rather than work being siloed within one team.
These and other tech practices mesh with the bank's "build first" mentality, which promotes "technology as strategy," Crane said.
"We build and own the systems that define how we compete instead of relying on outside vendors with generic roadmaps to help us innovate and scale," he said. "Most banks buy technology that fits their current workflows; we build software and systems that anticipate where financial services is heading five years out."
To decrease the bank's reliance on third-party vendors of critical technology, Crane is guiding an initiative called Axos Universal Core, which aims to construct a fully owned and fully up-to-date core banking system.
Axos has found that its own software and tech systems become more cost-effective than depending on vendors once the bank's needs exceed the capabilities of off-the-shelf technology, Crane said. The $28.2 billion bank has even become a vendor, of sorts, by supplying white-label versions of its proprietary technology to other financial services providers.
What does all of this mean for Axos and other banks going forward?
"The winning banks won't just look like software companies," Crane said. "They will be software companies that happen to hold a banking charter."
