Capital One is reaping the rewards of continued investment in tech and talent as they aid its AI strategy.
“We are in the 13th year of an all-in technology transformation,” Chief Executive Richard Fairbank, said during the third quarter earnings call on Oct. 21. “This transformation has been from the bottom of the tech stack up, essentially building a modern technology company that does banking.”
As the bank moves up the tech stack, its AI strategy is accelerating, Fairbank said, adding that Capital One’s biggest competitors are stepping “up their levels of investment, and we need to do the same.”
“A new front in this battle will be AI-driven experiences,” Fairbank said.
The $648 billion bank is focused, he said, on deploying AI in:
- Customer experiences;
- Efficiency in back-end operations; and
- Credit, fraud and risk management.
Cap One plans to increase its investment in AI tech and talent, Fairbank said, adding that these investments will be the basis for the bank’s sustained long-term growth.
“There are a small number of large modern technology companies fully in the cloud, built on modern applications and data,” Fairbank said. “They are in a unique position to win as the world continues to evolve, [and] we are one of them.”
The acquisition
Capital One got regulatory approval for its merger with Discover in April.
The McLean, Va.-based bank has reported $960 million in integration costs since Q3 2024:
- $140 million in Q4 2024; and
- $63 million in Q3 2024.
The bank aims to merge its tech stack with Discover’s to “leverage our data and decisioning infrastructure,” Fairbank said.
The acquisition has also given a big boost to Capital One’s AI strategy, Alexandra Mousavizadeh, co-chief executive at Evident AI, previously told FinAi News.
The bank “has doubled the size of its AI research team and increased AI headcount by 73% post-Discover acquisition, building one of the strongest AI talent bases across the banks,” she said.
Cap One, which does not disclose the exact AI engineer headcount number, ranks second globally on the heels of a vast AI talent pool and continued applications filed for AI-related patents, Mousavizadeh said.
“Capital One performs strongly in both areas — building AI teams, producing technical AI research and generating patents to reflect actual capability in action, not just intent,” she said.
By the numbers
During the quarter, Capital One reported:
- Net revenue of $15.4 billion, up 23% year over year;
- Efficiency ratio of 53.8% compared to 53.09% and
- Headcount of 77,000, up 47% YoY.
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