Top Innovators

Richard Fairbank: The Scientific Method

We wouldn't be able to ask 'What's in your wallet?' without Capital One cofounder Richard Fairbank's innovations in bringing analytics to the credit cards business.

Understanding how to effectively leverage analytics is one of the hottest topics in banking today. Bankers and regulators recognize the value of applying analytics-related technologies to everything from customer lifetime value to credit risk to channel trends. And vendors have responded with an array of sophisticated standalone solutions as well as by integrating analytics capabilities into core functions as varied as lending, product development, payments, CRM and fraud prevention. The widespread embrace of analytics is enabling banks of all sizes to strive to be "smarter," more responsive and better able to anticipate market changes and opportunities.

But the use of analytics wasn't always so pervasive. While financial services firms have long recognized the value of making better use of customer, risk and performance data, it wasn't until Richard D. Fairbank founded Capital One in 1988 that a company literally based its growth strategies on the ability to drill into customer data, develop targeted products and channels based on the information that came out of that analysis, and also price and underwrite those offerings based on that segmentation. Fairbank essentially made a science of card marketing. According to the McLean, Va.-based company's corporate overview, Fairbank (who now holds the titles founder, chairman and CEO) "founded Capital One ... based on his belief that the power of information, technology and testing could be harnessed to bring highly customized financial products directly to consumers."