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Richard Fairbank is the one who got the credit cards into the hands of ordinary Americans. He combined the power of technology and operation to change the course of credit card industry through his credit card giant Capital One. Headquartered in McLean, Virginia, Capital One is the seventh biggest commercial bank by assets in the U.S today. With innovations like teaser rates and zero-interest balance transfers, he has made amazing contributions to the credit card industry. With 755 branches across United States, Canada, and the United Kingdom, it is ranked #100 on the Fortune 500, #17 on Fortune's 100 Best Companies to work for list.

The path to entrepreneurship...

While doing his undergraduate degree at Stanford, he figured out that his interest lies in working with children. This lead to founding a training school for champion swimmers. Over time, he decided to go into business. He was hired to run a California community recreation agency in the 1970s and got the first taste of management there. To know more about running a business, he went back to Stanford to pursue his MBA. He then knew he wanted to start a business. But he had no money, no business experience, and no business idea.

The Spark...

The Stanford grad started his career as a management consultant in 1981 with Strategic Planning Associates, which merged and became Mercer Management Consulting, now part of the Oliver Wyman Group. Over the seven years as the consultant, he worked closely with clients from various industries. A consulting assignment with a bank gave him valuable insight into the credit card industry. That's when he stumbled upon the idea for Capital One. He noticed that the credit cards were the domain of the affluent and were a fairly standard “‘one-size-fits-all’ product. This made him think of the reasons behind and studied the market in depth to find a solution.

Fairbank partnered with Nigel Morris, his colleague at the Washington-area consulting firm. The research pointed to the facts that the card offers were not tailored to individual customers’ needs and risk profiles and that an annual fee was charged for the privilege of drawing on the issuer's credit. They also learned that the banks did not make use of the consumer data. They developed a framework to drop the annual fee and offer different credit plans toward different customer groups. However, they needed help with compiling the demographics and other statistics that would support segregation. The detailed understanding of its customers’ spending habits was vital. Oracle Corporation developed a software for them which on the input of information generated a variety of reports about potential customers and developed a plan based on information based strategy to tap the pockets of profitability which the competitors had missed. This radical plan had the potential to revolutionalise the credit card industry. However, when they began pitching their idea to major banks including Wells Fargo and Citibank, they faced rejection after rejection.

The birth of Capital One...

The continuous rejections from more than 20 banks and bleak prospects of success never swayed Fairbank. His efforts started to pay off when a small Virginia bank called Signet accepted the plan and opened a new credit card division in 1988. This led to the foundation of what later became Capital One. The company used the data of their customers and technology to assess the credit card risks and came come up with customised financial products. Based on the "data-based methodology", they offered different credit plans toward different customer groups. A scientific methodology was used in decision making and information technology was used to provide mass customization. Introduction of innovative concepts such as tailored interest rates and the ability to transfer balances from one card to another with a lower rate of interest made the concept enormously successful. It challenged conventional banking in many aspects paving a fresh path in the financial market. Signet's credit card business grew 100% in the first year of implementation of the new financial models, following which Fairbank was made the head of the credit card division.

Taking off to the top of the financial world...

In 1994, Signet spun off the credit card business into a separate subsidiary forming a new company called Capital One with Fairbank as the CEO. The company went public immediately and has returned more than 2,200 percent in stock price since then. He was named as the Executive Chairman in 1995 and as President in April 2003. The company made its way to the list of top ten credit card issuers in the United States by 1995. He ceased drawing a pay check in 1997 and has been receiving only returns from his shares.

Capital One thrives on innovation and change and the essence of innovation is experimentation. Every idea goes through a series of tests by marketing, operations and IT teams before it gets implemented. Fairbank’s vision for the company was not limited to credit cards. Along with credit cards, Capital One also sold auto insurance, mortgages, long-distance service, auto loans, banking and savings products. After the success of Capital One, Fairbank invested in other areas too. A cellular-telephone service company called America One Communications was launched in 1995. This thriving business was later sold to other telecom companies. He co-founded Advocate Financial LLC in 1998. Capital One launched national brand in 1999 and small business credit card in 2001. The company grew organically and through acquisitions like auto financing company Summit Acceptance Corporation in 1998, PeopleFirst Finance LLC in 2001, Onyx Acceptance Corporation in 2004, Hibernia in 2005, North Fork in 2006, NetSpend in 2007, Chevy Chase in 2009, ING Direct and HSBC US Card in 2013, Level Money in 2015 and Paribus in 2016.

Personal life...

Fairbank holds an MBA from the Stanford Graduate School of Business and a bachelor’s degree in economics from Stanford University. Fairbank loves playing hockey. He is married to Chris Fairbank, whom he met while doing community work with kids. They have 8 children. A dedicated family man, he set aside a couple of hours every evening to spent with his kids in their growing up years.

Management style...

Fairbank has built Capital One to be a people centric progressive workplace with great entrepreneurial culture and community engagement. His management style is a free administration style, often described as "new age". He is not the one that expects the boss to be on top, dictating solutions down to employees. He encourages his team to dream up new solutions and be their own boss. The company's policy of rewarding its employees with stock options over and above their salaries gave them a feeling of ownership and a more personal stake in the achievement of the company.

Associations and memberships...

Non-executive director of MasterCard International and Chairman of its U.S. region board of directors
Previously the member of President’s Council on Service and Civic Participation
Member of the Stanford Business School advisory council, the Financial Services Roundtable, and the board of directors of the BITS Technology Forum
Chairman and Chief Executive Officer of Capital One Auto Finance

Awards and accolades...

Honoured as a Washington Business Hall of Fame Laureate in 2008
Received Stanford Graduate School of Business's Excellence in Leadership Award in 2006
Named as the Banker of the Year by the American Banker in 2006
Awarded Washingtonian’s "Business Leader of the Year"
Named among Worth's list of the top 10 CEOs and "50 Best CEOs"
Received Future Banker’s list of "influential personalities in financial services"
Awarded Credit Card Management’s "Entrepreneur of the Year"
Recognized as one of the top “100 CEO Leaders In STEM” by STEM connector in partnership with US News and World Report, the Business-Higher Education Forum and Fortune magazine


Don't take a job because it would look great on your resume. The resume that really matters is the one between your two ears. I see so many people losing sight that this is not life or death. Don't sell your soul but do the best you can.
Good leaders not only have to be bold to get people enthused about the company's goals, they have to be themselves.
Dream instead of chasing the next step in a career. Don't chase success. Chase a dream. When you give up chasing success and instead chase the dream, you get liberated and you're able to define success on your own terms..
The most entrepreneurial opportunities are the ones that are in front of us.
Every interaction with the customers is a selling opportunity.
Great forward progress comes from setback. Try to harness that energy, and turn it into something that otherwise might not be possible.

Hope readers caught up the spark...