Why Capital One Labs Is Banking On Experimentation

Even traditional banks are getting in on the R&D lab game.


Log in to your account, check balance, find a branch, wait for assistance, repeat.


When it comes to online banking, the typical user experience is pretty mundane. But corporate bank Capital One is using its four-story, San Francisco lab to experiment with hopes of breaking the slow-iterating bank mold.

Experimenting With Mobile Banking

Upon opening its San Francisco doors in 2012, Capital One Labs was looking at ways to enable point of sale for small businesses through its growing iPad user base.

Within six weeks of building a prototype and shopping it around, they decided to partner with Sail, VeriFone’s mobile card-swiping device, to enable point of sale for small businesses. “That became the sale acquisition and it is the essence of our Spark Pay product that is now on the market,” says Skip Potter, Capital One’s vice president of engineering.

Before they decided to partner, they built. Their first attempt at tech was Capital One’s two-month pilot Sure Swipe–a verification feature which Potter says became the entire base for Capital One’s mobile app after only a couple of months.

Another lab-led experiment was figuring out a way for customers to more easily cash in their rewards points, says senior director of technology innovation, Joshua Greenough.


“We built a little prototype that we affectionately called ‘Rewardly,’ in the lab and tested it out in a number of markets, and a number of iterations,” Greenough says. “We learned a lot.

In the process Greenough realized a connection problem while the entire app initially ran server side. “Wi-Fi connection or the 3G connection was terrible–you were waving this thing in front of it, needing more bars to check the points balance.”

“It has gone from little tiny thing, test it, iterate it, learned, failed, started again, fixed, kept going, failed again, fixed,” he says.

Café 360, Where the Magic Happens

Wanting to quickly check balances was a common question posed by café goers and passersby when asked what frustrated them most with banking apps.

Step into the labs’ first floor where real-time customer experimentation meets free coffee. It’s an open place for people to come to meet, work, grab a coffee… and pay their bill. It’s a place where baristas take drink orders and banking requests.


The two-story café acts as somewhat of an unexpected testing ground and even an informal incubator, where Wi-Fi seekers work and often end up test-driving Capital One’s Spark Pay products into their own small businesses at any point of the day.

“We have a conversation and it really brings that customer to the forefront of the pilots, and the incubation of the innovation that we are doing, rather than starting with MVP or something like that,” Greenough says. “They become beta customers. Free coffee surprisingly generates that.”

The café is also used to hold events like hackathons, Women Who Code events, and even Steve Wozniak speaker series. The team says they hope to utilize the bustling café space as an open-sourced hub and recruiting tool through partnerships with local organizations like the Stanford design school.

“We would love to figure out how we can leverage our space for some of the research they are doing,” Greenough says. “Amp lab has generated some really amazing open source tools–that is something that we really want to directly join the momentum. If we could do that, if we could be their hub in the city–that could be quite fun.”

Hacking a High-Density Work Space

With a perimeter workspace that hangs on the corner of San Francisco’s financial district–where half of the lab is a café–designers had to ditch traditional office design and start from scratch.


Design strategy director Evelyn Huang says the lab adopted “Design Thinking” strategy to make grandiose use of little space. From modular furniture to hardware tools in multiple places, every area is an experimenting zone.

“Yes, you need space, yes you need tools, but people thrive on being able to grab things from different spaces,” she says.

Potter says transferable furniture and sliceable tables are important for brainstorming projects in the high-density property. “I have seen Evelyn run some workshops here where there were probably eight teams running in this little space here working on their own little projects. I am just amazed that we could fit that many folks in here and still have it be a productive space.”

Another plus for modular design–eavesdropping, says Huang. “You want people to steal ideas from each other because that is how good stuff is made,” she says. “This is so open, and yet you can create your own walls.”

On the third floor, you’ll find a MakerBot for modeling things like pay dongles and an Oculus Rift for augmenting banking interfaces of the future.


Other labs’ locations have soldering material, 3-D printers, Arduinos, and Pis to experiment with the latest hardware a potential banking client might use, says Greenough “We sometimes have contests around doing applications on a Raspberry Pi,” he says. “That is as much about launching a new product into the future as practicing it.”

Huang says from day one, the lab was designed by the whole team–designers or not. Due to its success, mobile leads are now involved in the design process at other Capital One locations, kicking out corporate traditions of designer-exclusive real estate.

Rethinking Banking Behavior

Beyond the physical space of the lab, more people at Capital One are looking to the labs for design thinking for both service and major functions, says Huang.

Capital One’s CIO Rob Alexander says new data tools retrieved from the labs–such as the Bundle acquisition–have quickly help them evaluate how customers interact with credit cards across the company. With Bundle, instead of seeing a unintelligible combination of letters and numbers on your credit card statement, a merchant logo and name shows up for each transaction.

“In the late 1980’s when this company started and this idea of data-driven experimenting emerged, the tools to do this were fairly limited,” Potter says. “We really had to build a company around this whole notion of large-scale testing in the mass market.”


Started as a company that provided analytics on aggregated spending and local data, Bundle’s data has contributed to the iPad apps’ UI, in a feature called called “Enhanced Transactions.”

Alexander says lab directors are also rethinking tools by looking to neighboring big data companies like Google and LinkedIn as they tried to figure out how to turn 3,000 statisticians into data scientists. “We are really transitioning from the old-world databases to technology skills but also a different kind of analyst–an analyst who, on the business side, is more facile and actually engages with the data.

Potter says that because of the labs, the company is also rethinking roles of product managers so that talent can achieve rockstar status without having to climb the corporate ladder.

“In the last three months, we have been looking at our technology talent and giving them a career trajectory that doesn’t need to be limited,” Alexander says. “That is why Josh, Skip, and a lot of folks you see are working on things that 10 years ago were not central to the mission of anything. Now, that is what our bank is becoming all about.”

It’s Capital One’s governance structure that lets experiments move fast from its labs to one of the most robust banking companies in a short period of time, Potter says.


“Rob, myself, and our COO meet monthly,” he says. “When you have that level of commitment at a senior level going, ‘I want to see what is going well, I want to see what you are delivering,’ that’s pretty awesome.”

Potter says it’s the structure that attracted himself and Greenough to the company when the labs opened two years ago and it’s the pitch they give today. “We’ll say, ‘Hey we are a lab but we’ve got 65 million customers that you can go have an impact on–would you like to do that?’”