- 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 Q2 2023 earnings call, for the three-month period ending June 30.
- “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 Q1 2023 and 16% year over year. Net revenue increased just 1% year over year, to $9 billion.
Capital One moved quickly to cloud, shuttering its on-prem 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.
Reigning 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 during the earnings call. “We brought that down as we've been able to use our brand — our recruiting brand — to bring incredible talent into the organization.”
The company decreased operation expenses by 3% in Q2 and cut 1,100 tech jobs in a January workforce reconfiguration that integrated Agile and risk management oversight into its engineering teams.
But technology remains central to the company’s business strategy.
To advance its AI capabilities, Capital One recruited Prem Natajaran 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.