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Table of Contents

Breakdown & Background

Research

Analysis

Proposal

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Case Background

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Client

Operating for 28 years present in the US, UK, and Mexico
Offers credit/debit card and banking services
Manages 43 Million accounts with 755 branches
Named 10th best company to work for as of 2022(Fortune 100) and was the 5th largest credit card issuer by purchase volume in 2016

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Capital One Mission

Our mission is to help our customers succeed by bringing ingenuity, simplicity, and humanity to banking.

Capital One was founded on the belief that no one should be locked out of the financial system.

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Task

Identify what deters SBOs from applying to loans with the emphasis on customer accessibility and application process.

Analyze current application flow and create potential UX/UI improvements
Develop solution around mitigating risk of SBO customer lost due to high interest rate and low financial literacy

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Small Businesses and Low and Moderate Income Communities.

Nationally, there is roughly 12 million small businesses.
Assuming this new product will be piloted in Richmond, VA and Washington DC, a large percent of SBOS operate in LMI communities.
Roughly 1.3 million/12 million* 100= roughly 10.8%

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Problems that Small Businesses Face

Lack of funding for their individual Businesses
Lengthy and difficult application process
Companies willing to help smaller businesses with higher interest rates.
Ineffective Web presence.

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Application Process

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Application Process (Continued)

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Application Changes

Bringing forth the Application to the main page of Capital one
Giving each of the options at the bottom of the page a summary about what each one is or providing either a FAQ link about each one, or a link that redirects them to an informational page.

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Analysis

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SWOT Analysis (low interest credit card/loans)

Strengths

Allows SBOs to maximize growth and expansion because they can focus larger majority of funding to their business
Pay back a smaller debt - more manageable and, therefore, more appealing to SBOs
Helps SBOs build better credit

Weaknesses

High difficulty determining credibility of the small businesses due to insufficient financial information (i.e., most small businesses lack detail in their balance sheets)

Opportunities

Expand on mission statement by being more accessible to SBOs
Specifically target underserved SBOs who shy away from banking resources
Build a stronger brand by advertising support for customers and inclusivity

Threats

Small businesses have a higher chance of failure and are more susceptible to changes in the economy, which could lead to SBO’s being unable to pay back interest

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SWOT Analysis (website and online classes)

Strengths

Microlearning courses increase long-term retention by up to 80%
Creates engagement and improves comprehension by breaking down a lengthy application process into consumable bite-sized portions
Customized for needs of SBO

Weaknesses

Estimate $50,000 for design cost to website extension based on average ecommerce website for business plus an additional $30,000 in annual maintenance
$100,000 for annual marketing

Opportunities

Reduces cost and manpower → Requires one time development effort
Opens client base to SBO previously lacking financial literacy
Increases web presence → Creates a new consumable product for clients

Threats

Risks of fragmented learning
Microlearning is limited scale in regards to content available to be covered
Discourages client consumption if online course is too lengthy or pricey

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Cost Breakdown

Initial Web Design: $50,000
Annual Maintenance Cost: $30,000
Annual Marketing Cost: $100,000
Annual Subscription Fee to Online Classes/Courses (excluding free classes): $30

1.3 million SBOs with roughly 10.8% of market audience
Require 6,000 SBOs to take advantage of service to break even, which is less than 1% of total population in pilot areas of Richmond and DC

Estimates based on WebFX website design and marketing info

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Conclusions

While offering low interest credit cards or loans would likely attract underserved SBOs, it is difficult to quantify the risk that Capital One would be taking by offering such products - SBOs lack credibility that they will pay back interest.

By providing SBOs with resources that enhance financial literacy, however, Capital One would be able to mitigate risk and address the barriers that SBOs face within the banking system.
Increase business success
Cultivate better, more informed financial decision making
Boost customer relations by incorporating a human-centered strategy by prioritizing SBO growth (strengthen Capital One’s brand)

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Proposal

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Potential Solutions

Creating low interest credit card or loans specific to SBOs
Extension to Capital One website which advertises services targeting SBOs
Building a specialized consulting team (potential to expand on informal ad hoc consulting)
Short video classes aimed towards increasing financial literacy
Short course for SBOs
Partner with nonprofits or pro bono organizations which share similar values to increasing financial inclusion and supporting underserved small businesses
Advertising campaign - paired with website extension and partnerships

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Potential Partnerships

Globant

Spectrum Wifi

Small Business Development Centers

Globant is a web-design company that has worked with a diverse range of companies, including American Express.
Capital One could collaborate with Globant to maximize the usability of the online course platform.

Capital One could consult the FPA when creating the material for the online course, as this association specializes in financial education.
The FPA also operates a pro bono program for financially educating underserved communities.

Spectrum Wifi also caters to small businesses, so Capital One could advertise their business wifi packages in exchange for a sponsorship.

Offers free consulting services to small businesses
Build stronger business strategy within SBOs and provide guidance to accessing capital
Help SBOs grow their businesses’ sustainability and stability

Financial Planning Association (FPA) of Central Virginia

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Bringing it Together

SBOs can qualify for lower interest credit cards or loans by showing proof of completion of online courses
Supplement lower credit score?
Partner with other organizations to build curriculum for online courses or build extension to Capital One’s website
Partner with pro bono organization(s) which offers consulting services for small businesses (financial planning and business strategy)
Utilize website extension as a resource for SBOs to learn about sustainable finances, receive guidance on application process, and reach out to professionals for financial or business help

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