Wharton FinTech Interviews Capital One

Tell us about the evolution of digital focus at Capital One. 


Capital One was founded on an information based strategy. In some ways, we were a Big Data company before that term was invented. What we need to do to evolve is prove that a bank can use that data intelligently, deliver value for clients, and design an experience that is delightful and intuitive.


Banking is a highly regulated industry and because of the more traditional nature of banks (compared to start-ups) it can be difficult to create a culture of innovation.  What is Capital One’s culture like? How is the company structured to innovate?


Capital One’s historic culture believes in the power of data. It’s sort of like that old William Edwards Deming quote: "In God we trust, all others bring data." The good news is that we are still a founder led company and our CEO has set out some pretty aggressive targets in terms of innovation. That means paying attention to all of the startups out there, but not just copying them for the sake of a “me too” strategy. That’s why we’re investing in Digital Labs, design thinking, and user experience (through acquisitions like Adaptive Path).


How does the digital lab work with the business units?


Adaptive Path was recently acquired by Capital One.  Adaptive Path’s Chief Creative Officer said in a blog post that the fit made sense because he felt the fit for the partnership made sense and that it would continue to allow Adaptive Path to do “great work.”  From the point of view of Capital One, what was the impetus for acquiring Adaptive Path?




Adaptive Path’s Chief Creative Officer also remarked that “[Capital One has] built sophisticated practices in digital product design, design thinking, and experience research and development that we can build on and cross-pollinate with our practices”


Can you tell us more about what kind of design principles Capital One uses?


Within Digital and the Labs we are focused on the human centered design experience. That means getting out there and talking to our customers, seeing how they live their lives, solving some of their existing challenges, and also trying to surprise and delight them. One example of that is a program we launched called Second Look. Second Look scans your transaction history for either suspicious purchases (like a double swipe) or bills that vary more than usual (say your Comcast bill increased from a promotional rate to a higher price point). We launched this as a Minimum Viable Product with just email alerts, but the response from customers has been so positive, we are now looking at how to expand the offering. Second Look is actually a good example of co-creation with our customers, since we are tweaking the experience based on real-time customer feedback.           


Each of those parts of the business shifts the focus back to the customer. And when you give customers


Capital One is developing functionality to improve the experience for its customers.  I understand that the bank developed a Purchase Eraser feature that lets customers buy plane tickets or hotel stays with a credit card and then, within 90 days, pay for those purchases with reward miles instead. In November, Capital One launched SureSwipe, which replaces passwords on its iPhone app with a pattern customers trace over a screen of dots.


Can you tell us some about the things Capital One is developing now in the world of digital and innovation?


How do you determine what types of products or services to create or prioritize? How does Capital One leverage the data it has on consumers and consumer preferences related to their banking products to inform this strategy?


In a world where customer data security is of huge importance, how is Capital One innovating in this space?


There are two quick examples that spring to mind. The first is SureSwipe, a feature which makes it easier for customers to log in and access their data on mobile, without having to remember (or re-use) the same password over and over. The other is our Digital Wallet, which launched with ApplePay last month. When customers use their iOS device to pay – either at the point of sale or online – we will send a single use token instead of the customer’s full 16 digit credit card number. This makes life harder for fraudsters and gives our customers more confidence that they can use their phone for payments.   



In 2012, Capital One acquired ING Direct, now Capital One 360 which was an online bank (no physical branches).  Has that acquisition had an impact on digital at the company?


Apple Pay has the potential to have a huge impact on the payment industry and the customer’s payment experience.  Can you tell us some about the approach Capital One took with Apple Pay and how the company thought about the digital interface and innovation for this service?


For banks with a branch network, one of the industry’s initiates is to create a similar look and feel with all of its acquisitions channels.  How does that impact your work? How is Capital One designing digital experiences that translate across channels?


Recently Rob Alexander, CIO of Capital One discussed, how Capital One is in the midst of moving from 70% to 75% outsourced IT to 70% to 75% in-house so that the company can write its own code for customer facing software.  Can you talk some about this change?


For Wharton MBA students, do you have any suggestions for pursuing a career in digital strategy and innovation?


As most alumni will tell you, the soft skills are incredibly important. Every day I think back to classes like communications and negotiations, but only occasionally do I have to build a really complicated financial model (although it does happen!). In this type of role you’ll have to influence people, both internal stakeholders and partners, tap into different parts of the organization, build new projects with limited resources, and then argue for why those projects should be launched at scale.


One last question: from a personal standpoint, what is a company you admire for their digital and innovation leadership?  What do you think Capital One can learn from them?


I think Larry Page has done an incredible job at Google. If you look at the company, they are firing on all cylinders when it comes to innovation. One of the reasons for that is that different groups are empowered to participate, whether it is through 20% time, Google X, investing via Google Ventures, or acquiring startups via corporate development. When I think about where we want to get as an organization, that model is incredibly helpful, since it seeks out innovation from multiple sources both inside and outside the company.




Capital One IT Overhaul Powers Digital Strategy (Rob Alexander article) http://www.informationweek.com/strategic-cio/executive-insights-and-innovation/capital-one-it-overhaul-powers-digital-strategy/d/d-id/1141531