Partnerships in Training

Capital One Financial Corporation is a major supplier of credit products in the US market. A key part of their growth and success over the last decade has been an Information Based Strategy collecting large quantities of data and performing advanced analysis to leverage the information obtained to make good business decisions. The ability to continue this successful strategy is contingent on training their analysts in key analytical techniques. Through a partnership with the were developed in forecasting, optimization, and simulation. These courses have not only been well received by the analysts, but have led to considerable early return on investment with one project forecasted to reduce costs at their Richmond (VA) mail center by more then $2 million annually. We describe this successful partnership as an example of the kind of partnerships from which universities and private corporations can jointly benefit and highlight what we believe to be the key to the training's success: the use of internal and external trainers who work as a team to provide sound, comprehensive training that is relevant to the problems faced by the analyst. Credit card companies are in a ideal position to exploit Operations Research and Management Science (OR/MS) methodologies like forecasting, optimization, and simulation (Board et al. 2003). At the core of most credit card companies are their credit risk models that predict customers' credit worthiness based on certain criteria, allowing decisions to be made about awarding credit cards and the credit limit and interest rates that should be offered (Trench et al. 2003). Credit card companies collect large quantities of data on transactions, customers, and their internal processes and operations. They use this data to make forecasts of diverse quantities, such as their customers' non-payment rates, incoming mail and phone call volumes, and response rates to mail solicitations. They use the forecasts in making complex decisions from marketing strategies to delinquency cure to call center staffing, each of which requires sophisticated analysis. Many of their internal systems, such as mail and call centers, are dynamic in nature and must be designed to be robust to the variability experienced in their incoming volumes (Saltzman and Mehrotra 2003). Capital One® is a leader in the direct marketing of MasterCard® and Visa® credit cards, auto loans, and other consumer financial services. With more than 47 million accounts, it has one of the world's largest financial services franchises. The use and management of …