Capital One 2012 Annual Report Download - page 34

unions for loans and deposits. Our competitors also include automotive finance companies, mortgage banking
companies and other financial services providers that provide loans, deposits, and other similar services and
products. In addition, we compete against non-depository institutions that are able to offer these products and
services. Securities firms and insurance companies that elect to become financial holding companies may acquire
banks and other financial institutions. Combinations of this type could significantly change the competitive
environment in which we conduct business. The financial services industry is also likely to become more
competitive as further technological advances enable more companies to provide financial services. These
technological advances may diminish the importance of depository institutions and other financial intermediaries
in the transfer of funds between parties. In addition, competition among direct banks is intense because online
banking provides customers the ability to rapidly deposit and withdraw funds and open and close accounts in
favor of products and services offered by competitors.
Our businesses generally compete on the basis of the quality and range of their products and services, transaction
execution, innovation and price. Competition varies based on the types of clients, customers, industries and
geographies served. Our ability to compete depends, in part, on our ability to attract and retain our professional
and other associates and on our reputation. In the current environment, customers are generally attracted to
depository institutions that are perceived as stable, with solid liquidity and funding.
We believe that we are able to compete effectively in our current markets. There can be no assurance, however,
that our ability to market products and services successfully or to obtain adequate returns on our products and
services will not be impacted by the nature of the competition that now exists or may later develop, or by the
broader economic environment. For a discussion of the risks related to our competitive environment, please refer
to “Item 1A. Risk Factors.”
EMPLOYEES
A central part of our philosophy is to attract and retain a highly capable staff. We had 39,593 employees, whom
we refer to as “associates,” as of December 31, 2012. None of our associates are covered under a collective
bargaining agreement, and management considers our associate relations to be satisfactory.
ADDITIONAL INFORMATION
Geographic Diversity
Our consumer loan portfolios, including credit cards, are diversified across the United States with modest
concentration in California, Texas, New York, Florida, Louisiana and Illinois. We also have credit card loans in
the U.K. and Canada. Our commercial loans are concentrated in New York, Texas, Louisiana and New Jersey.
See “MD&A—Credit Risk Profile” and “Note 5—Loans” for additional information.
Technology/Systems
We leverage information technology to achieve our business objectives and to develop and deliver products and
services that satisfy our customers’ needs. A key part of our strategic focus is the development of efficient,
flexible computer and operational systems to support complex marketing and account management strategies, the
servicing of our customers, and the development of new and diversified products. We believe that the continued
development and integration of these systems is an important part of our efforts to reduce costs, improve quality
and provide faster, more flexible technology services. Consequently, we continuously review capabilities and
develop or acquire systems, processes and competencies to meet our unique business requirements.
As part of our continuous efforts to review and improve our technologies, we may either develop such
capabilities internally or rely on third party outsourcers who have the ability to deliver technology that is of
higher quality, lower cost, or both. Over time, we have increasingly relied on third party outsourcers to help us
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