Highlights:

  • Using bespoke processes, dynamic warehouse provisioning, and self-service features, it also enhances insight and visibility over Snowflake costs and automated governance.
  • One of the important features of this cooperation indicates how Snowflake is constructing an ecosystem to expand its cloud data management expertise.

Capital One has bundled its vast cloud migration efforts into a new software business dubbed Capital One Software. Its initial product, Slingshot, helps organizations control cloud expenses and automates governance on top of the Snowflake platform.

This is important news for both businesses. For Snowflake, it means the ability of highly regulated enterprises to fully commit to cloud data migration. For Capital One, it offers a way to monetize its substantial effort in data management to uncover attractive new prospects inside the technology industry.

The new service assists with expense management by providing clever cost-cutting ideas. Custom processes, dynamic warehouse provisioning, and self-service features enhance insight and visibility over Snowflake costs and automated governance. As part of Capital One’s early shift to the cloud, several functions were developed out of necessity.

All in on cloud data

In 2015, Capital One was one of the first banks to commit to the AWS cloud fully.

Salim Syed, head of engineering at Capital One Software, said, “We believed the cloud could help scale the number of queries its 6,000 business analysts could run concurrently and make it easier to share data across the business.”

In addition, the cloud provided a mechanism to isolate workloads so that the analytic teams’ queries would not affect others. This was a significant difficulty with their on-premises database, especially at the busiest time of the month.

Capital One began transferring all its data to Snowflake in 2017, which helped automate several aspects of data management and sharing. However, this created additional data management difficulties. The platform’s easiness enabled analysts to develop new insights as quickly as they could integrate datasets. However, they quickly realized that many of these searches were ineffective and frequently led to the deployment of excessive cloud capacity, which raised prices.

Syed said, “The challenge was making sure you are using Snowflake as efficiently as possible. So, the team worked on a new management tier that helped create and enforce best practices across Capital One.”

Developing a new model

The conventional paradigm of attempting to centralize analytics appeared to be impracticable as major teams lacked the competence and subject knowledge to handle data across business divisions. Consequently, they created self-service solutions that enabled business units with data management, cost controls, and automated governance. Ever since the migration from the on-premises data infrastructure, they onboarded almost 450 new use cases.

It also reduced Snowflake costs by 27%, improved query costs by 45%, and saved 55,000 hours. To cite an example, it can notify analysts when a query is unproductive so that they may disable it and build a better one. It also prevents overprovisioning of data warehouses. For instance, they found that development and testing teams routinely provisioned more significant than needed instances.

Governance as a service

In the early days of the cloud, many regulated industries were worried about moving their operations off their internal servers due to governance concerns. Capital One’s success demonstrates that even the largest and most heavily regulated companies can be successful by fully embracing the cloud.

Nick Kramer, leader of applied solutions at SSA & Company, stated, “Any Snowflake customer would have to be intrigued by Capital One’s application, particularly for governance.”

All banks are subject to strict regulatory obligations, and thorough, quantifiable governance is a business need. Capital One’s experience in guaranteeing governance, paired with large data quantities, velocity, and privacy, delivers a compelling data management value proposition, especially for small and medium-sized organizations that lack the resources to establish equivalent capabilities.

Nick Kramer said, “The most promising features we see are the focus on and deep partnership with Snowflake, the modular building blocks for customization, and the governance workflow. This combination should enable Slingshot to accelerate feature development in response to customer feedback, underpinned with governance-enabled data quality and usability.”

Last mile analytics

The second important feature of this cooperation indicates how Snowflake is constructing an ecosystem to expand its cloud data management expertise.

Priya Iragavarapu, VP of global management consultant AArete’s Center of Data Excellence, said, “The analytics user journey is disparate since it involves connecting to the right data source, submitting queries via the Snowflake user interface (UI), and then extracting the data to visualize in more powerful ways using tools like Tableau or Power BI.”

Capital One eliminated the need to switch apps by combining content management, project management, and communication. Last mile analytics is the ultimate leg of the analytics journey. Iragavarapu perceives most considerable inefficiencies here because of the need for modifications, automation constraints, and complicated team interactions and communications.

This partnership between Capital One and Snowflake addresses this gap.

A model for the banking transformation

Eventually, this indicates a method for banks not just to innovate but also to acquire a competitive advantage against emerging financial technology businesses.

Ronak Doshi, a partner at Everest Group, an advisory firm, said, “This FinTech revolution is putting technology as the growth driver for banks, and the lead steers in the market like Capital One are now in an advantaged position to take these early bets and monetize them.”

Doshi added that FinTech companies are valued at 20-30 times their revenue, which is three to four times greater than major banks. Capital One’s software division will grow as they shift to a financial technology company. Capital One might get access to payment and banking services.

Banks and payment businesses are integrating their financial services and products into the leading Software-as-a-Service (SaaS) solutions utilizing Application Programming Interfaces (APIs).

Ronak Doshi said, “The next stage is banks offering these SaaS solutions and providing the banking and payments services APIs out of the box, creating stickiness with consumer relationship and owning the end-to-end experience. We see this future of banking as available finance or embedded finance to be a massive growth driver for the industry, and lead steers that have invested in these software businesses will be able to capture this opportunity.”

Snowflake is primarily designed for online analytic processing and unsuitable for transactional application requirements. Depending on the size, structure, and necessity for data aggregation, it is anticipated that organizations would utilize alternative databases for transactional purposes.