Dive Brief:
- Capital One is counting on a decade of concentrated investments in technology to grow its credit card and retail banking businesses, CEO Richard Fairbank said Thursday during a second-quarter earnings call.
- “Our modern technology capabilities are generating an expanding set of opportunities across our business,” Fairbank said. “We are driving improvements in underwriting, modeling and marketing as we increasingly leverage machine learning at scale and our tech engine drives growth, efficiency improvement and enduring value creation over the long term.”
- Capital One had pre-provision earnings of $1.4 billion, up 7% from this year’s first quarter and 16% year over year. Net revenue increased 1% year over year, to $9 billion.
Dive Insight:
Capital One moved quickly to cloud, shuttering its on-premises data centers in 2020. The company was also early to rationalize usage and build in data governance, implementing cloud cost controls as macroeconomic uncertainty intensified last year.
Drawing on its in-house tech experience, the company launched a software division and unveiled Slingshot, a commercially available enterprise data and cloud cost management solution for Snowflake customers, last year.
Reining in cost and realigning tech spend continues to be a priority for the company.
“We were making substantial investments in technology and we were supplementing that with some third-party resources,” CFO Andrew Young said Thursday. “We brought that down as we've been able to use our brand — our recruiting brand — to bring incredible talent into the organization.”
Tech is also the sector where Capital One cut 1,100 jobs in a January reconfiguration that integrated Agile and risk management oversight into its engineering teams.
The bank’s operation expenses dropped by 3% in the second quarter, Capital One reported Thursday.
To advance its artificial intelligence capabilities, Capital One recruited Prem Natarajan from Amazon’s Alexa organization in May. Natajaran, now Capital One’s chief scientist and head of enterprise AI, was brought on to lead the bank’s technology strategy, architecture and development for Capital One’s enterprise data, analytics and machine-learning initiatives.
