Capital One is a leading consumer finance and banking company in the US, with a small presence in the UK and Canada. It established itself as one of the fastest-growing credit card lenders during the 1990s as a result of aggressive and high profile marketing, underpinned by sophisticated credit analysis systems which allow the bank to customise each customer's borrowing terms according to risk. More recently Capital One has embarked on a strategy of diversification into areas such as auto finance, commercial loans and general banking, designed to reduce not only the group's dependence on credit cards, but also the likelihood of an unsolicited takeover. The group is now the last of a dying breed. Virtually all the other US specialist credit card lenders, such as Providian or MBNA, have now been acquired by larger groups and Capital One has often been flagged up an attractive potential target for a big bank seeking to expand its credit card business further. For now, though, the threat of an unwanted takeover has been reduced by the financial pressures affecting potential predators. Instead, Capital One has been the acquirer not the acquiree, snapping up businesses including the US operations of HSBC credit cards and online bank ING Direct. In 2019 it acquired from rival Synchrony Walmart's credit card business, adding millions of new customers to its portfolio. As a result of the steady expansion of its banking services it is now the 4th largest credit card provider in the US by card spend, the 6th largest lender in the US by customer deposits and one of the top ten by assets. Group revenues hit a new high of $28.6bn in 2019, though net income slipped back to $5.5bn. Total purchase volumes were $425bn. Founder Rich Fairbank remains CEO. An unusual blot on Capital One's copybook was a cyber security incident in 2019 in which personal information for 106m customers was stolen. Advertising has long been a key pillar of Capital One's strategy, with the long-established tagline of "What's in your wallet?". Brand ambassadors have included the comedian David Spade, actors Samuel L Jackson and Jennifer Garner, director Spike Lee and retired basketball star Charles Barkley. Taylor Swift was an unexpected addition to the ambassador roster in 2019.
Capsule checked 11th May 2020
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Adbrands Daily Update 30th Jul 2019: There was good news and bad this week for Capital One. On Monday, it unveiled the first fruits of a multi-year endorsement arrangement with Taylor Swift, perhaps the bank's most starry marketing partner to-date. The singer will appear in ads for the bank's Savor Card, whose cardholders will also have access to exclusive offers and rewards. A day later, Capital One confirmed that personal information had been stolen for around 106m customers and credit card applicants, one of the biggest data breaches suffered by any bank to-date. Confirmation of the theft came after police arrested a former employee of Amazon Web Services, where the data had been stored. She had boasted of her actions online under a pseudonym. The bank was alerted to the breach by an ethical hacker who had followed the same route into its data servers via a misconfigured firewall. "While I am grateful that the perpetrator has been caught, I am deeply sorry for what has happened," said Capital One founder & CEO Rich Fairbank. "I sincerely apologise for the understandable worry this incident must be causing those affected and I am committed to making it right."
Adbrands Weekly Update 2nd Aug 2018: Walmart appointed Capital One as the exclusive issuer of its store cards, ending a 20-year partnership with Synchrony, formerly GE Capital. The changeover will take place in July next year. The deal is a significant blow to Synchrony, representing almost 20% of that company's card portfolio, with a combined balance outstanding of around $10bn.
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