Capital One Shortens the Machine-Learning Curve

By McGeer, Bonnie | American Banker, April 27, 2017 | Go to article overview

Capital One Shortens the Machine-Learning Curve


McGeer, Bonnie, American Banker


Byline: Bonnie McGeer

When it comes to machine learning, it's the human learning curve that can be most crucial to the success of a project.

At the FinDEVr New York conference in March, Sandeep Sood, vice president of software engineering at Capital One, shared an interesting case study on how his company uses machine learning to analyze clickstream data. His pragmatic approach to implementing the new technology can be viewed as a template for others.

The most useful lessons he learned in the process had to do with strategizing ahead of time (think big for this part) and then rolling out the first use case (it helps to think small here).

To illustrate his point, Sood went all the way back to when electricity became available for general use. The business world had run without it and figuring out how to use it took decades. "There are tons of stories of companies that actually set up lab groups -- the way we set up lab groups to explore machine learning or voice OS or whatever it might be -- to figure out how to use this new technology called electricity," Sood said.

Many of the lab groups failed -- "they would try these prototypes out and they couldn't take advantage of electricity in the way they thought they could" -- because their focus was on improving the existing system. "Something so revolutionary as harnessing electrical energy required a complete rethinking of everything, top to bottom," Sood said. Not only the physical machines had to change, but the entire process.

That's a crucial insight still relevant to adopting new technology today, he said. The process of factories having to deconstruct how they work in order to capitalize on the use of electricity is a good analogy for what banks must do to effectively apply machine learning to their business models.

"It's going to affect every single business process, and it's going to take a fundamental rethinking of how we work today, how we market, how we prequalify customers at Capital One, in order to really take advantage of it," Sood said.

Capital One is up to the task, in Sood's view. He joined the $357 billion-asset bank a few years ago when it bought Monsoon, a mobile design and development company that he co-founded. Going from a startup to a large bank was an adjustment, he said. But he feels Capital One has a startup mentality that traces back to its own beginnings. "In the '80s and '90s, it was using data to offer credit cards to customers that had previously never had access to credit cards," he said. …

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