1. Capital One’s Statistical Problems Our top ten list August, 2006 Bill Kahn Chief Scoring Officer bill.kahn@capitalone.com

2. Confidential 6/14/2015 2 Overview What Capital One Does How We Do It What We Need 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

3. Confidential 6/14/2015 3 What Capital One Does Geography US Canada UK Spain Italy Lifestage Acquisition Underwriting Account management Collections Diversified consumer finance Products Card Auto Medical Home IL SB Banking

4. Confidential 6/14/2015 4 Clean historical data Brainstorm products and treatments Customer value measures Implement without blunder Optimal DOE on random sample Model with history and treatment Assign 90% to optimal Collect timely data How We Do It : Quantitative Continuous Learning—QCL

5. Confidential 6/14/2015 5 What We Need (Statistically speaking…) 10: Rejection Inference 9: Valuation 8: Complex models 7. Adverse Action 6: Database design 5. Advanced curve fitting 4: Loss Function Optimization 3: DOE 2: Secure data sharing 1: Great people

6. Confidential 6/14/2015 6 Summary Capital loans money To individuals who competitors misprice And we could make good use of more advanced statistical technology 10:Rejection Inference 9:Valuation 8:Complex models 7:Adverse Action 6:Database design 5:Advanced curve fitting 4:Loss function optimization 3:DOE 2:Secure data sharing 1:Great people

7. Confidential 6/14/2015 7 Q&A