Richard D. Fairbank: Leveraging Information And Technology

There are some people who get a clear picture of what is to come and take advantage of it. This means though that you must also have fortitude as people may not fully understand what you want to happen.

Richard D. Fairbank is the founder, chairman and CEO of Capital One. This is a diversified financial services company on the Fortune 500 list. While starting out in the credit card business the company is now one of the top 10 banks in the U.S. This bank provides a host of financial products and services to consumers, small businesses and commercial clients. It has approximately 1,000 branch locations in Washington, D.C., Virginia, Maryland, New York, New Jersey, Louisiana and Texas.

Before it grew to be so large what became the bank was simply an idea by Fairbank and co-founder Nigel Morris. Their idea was a major innovation in the credit card industry. The two were main believers of information and how it could be used.

They would offer teaser interest rates and zero balance transfers.  They would also drop the annual fee and instead offer different credit cards to targeted segments of the population.  This was a form of targeted marketing which is now commonly used today. The information needed about customers was already available in the financial industry. The emergence of computers and software made the concept possible since it would mean analyzing an enormous amount of data involving a large number of people.

The two approached a number of financial institutions before over one and a half years later Signet Bank operating in central Virginia tried their system. While met with skepticism and resistance by some senior officials the idea took off. Fairbank headed the bank’s credit card division in 1993 after the departure of its former head.

Signet spun off the credit-card business into a subsidiary in 1994 and this became Capital One Financial Corporation. A year later this subsidiary had higher sales and growth than the parent company. Signet was bought by another bank but Capital One remained independent.

Today Fairbank is head of Capital One which is now a publicly traded company. He placed information technology in a leading role for the company instead of the tradition supporting role. The result has been a runaway success.