Capital One Case Interviews: Your Comprehensive Guide (2020)

Capital One uses case interviews to identify promising candidates to hire for many of their business roles, including their business analyst, data analyst, and strategy analyst roles.

 

In a Capital One case interview, you’ll be placed in a hypothetical business situation and asked to develop a recommendation or answer to a business problem.

 

Capital One’s use of case interviews may be surprising to some people because case interviews are typically used in consulting interviews. Capital One is a bank and financial institution, not a consulting firm.

 

However, there are two reasons why Capital One uses case interviews.

 

The first reason is that compared to other traditional banks, Capital One likes to position itself as a data company that happens to be in the financial services industry. There is a heavy emphasis on using data to drive business decisions. Therefore, case interviews are an effective way to assess problem solving and quantitative thinking.

 

The second reason is that Capital One hires a lot of former consultants from top consulting firms such as McKinsey, BCG, and Bain. A lot of the business divisions at Capital One are run by former consultants who run their teams like a consulting team. Capital One wants to hire people that can do the same type of work that consultants do.

 

For business analyst, data analyst, and strategy analyst roles, there are typically two rounds of interviews. Capital One first round interviews consist of one case interview. Capital One final round interviews consist of 2 to 3 separate case interviews and one behavioral interview.

 

In order to receive your Capital One job offer, you will need to nail all 3 to 4 of your case interviews.

 

This article will cover what qualities Capital One case interviews assess, differences between Capital One case interviews and consulting case interviews, how to solve Capital One case interviews, and Capital One case interview tips.

 

What Qualities do Capital One Case Interviews Assess?

 

Capital One case interviews assess four main qualities:

 

Logical, structured thinking: Capital One looks for candidates that are organized and methodical problem solvers.
 

  • Can you structure complex problems in a clear, simple way?

 

  • Can you use logic and reason to make appropriate conclusions?

 

Quantitative skills: Capital One looks for candidates that have strong analytical skills to solve complex business problems and make important business decisions

  • Can you read and interpret data well?

 

  • Can you perform math computations smoothly and accurately?

 

  • Can you conduct the right analyses to draw the right conclusions?

 

Communication skills: Capital One looks for candidates that can communicate in a clear, concise, and persuasive way.

  • Can you communicate in a clear and concise way?

 

  • Are you articulate and persuasive in what you are saying?

 

Business judgment: Capital One looks for candidates with strong business instincts that help them make the right decisions and develop the right recommendations.

  • Do you have a basic understanding of fundamental business concepts?

 

  • Do your conclusions and recommendations make sense from a business perspective?

 

Differences between Capital One Case Interviews and Traditional Case Interviews

 

There are three main differences between Capital One case interviews and traditional case interviews.

 

Capital One case interviews focus on quantitative analysis

 

Traditional case interviews have a balance between answering qualitative questions and solving quantitative problems. Capital One case interviews almost exclusively focus on the quantitative aspects of case.

 

Let’s consider a case interview in which you are trying to decide whether a friend should open up a mini-golf course as an investment.

 

In a traditional case interview, you would look into both qualitative and quantitative factors to make a recommendation. You would look at the market attractiveness, the competitive landscape, your friend’s capabilities, and the expected profitability.

 

For a Capital One case interview, you will focus almost exclusively on the expected profitability. Your framework would look at the expected revenues and expected costs of opening a mini-golf course to see what annual profits would be.

 

If annual profits are high, you would recommend opening a mini-golf course. If annual profits are negative or low, you would not recommend opening a mini-golf course.

 

In a Capital One case interview, you may cover some qualitative factors at the end of your calculations when you are discussing risks, but the qualitative factors will not be a critical component of solving the case.

 

Since most Capital One case interviews come down to setting up and solving math equations, they can be simpler and more straight forward than traditional consulting case interviews.

 

Capital One case interviews allow a calculator

 

Another big difference between Capital One case interviews and traditional consulting case interviews is that Capital One allows candidates to use calculators.

 

While this may sound like this makes the case interview easier, that is not necessarily the case. Since you are allowed to use a calculator, you’ll typically be dealing with bigger and messier numbers during a Capital One case interview.

 

While traditional case interviews use round numbers that are easy to work with, Capital One case interviews use large and more precise numbers. This makes some calculations too tedious to solve by hand, which is why you are allowed to use a calculator.

 

It is helpful to be familiar with basic financial products

 

Traditional case interviews don’t require any specialized knowledge in order to solve the case. You do not need to research any industries beforehand.

 

While this is generally true for Capital One case interviews, it does help to be familiar with how basic financial products work. In your final round interviews, you may be given a case focused on credit cards or checking and savings accounts.

 

If you understand how these financial products work, you’ll have an easier time with the case interview and the interviewer will not need to explain as much background information to you.

 

Here are the basics of what you should know.

 

Credit cards generate revenue through an annual fee, interchange, and interest.
 

  • An annual fee is a fee that the cardholder must pay in order to keep the credit card active

 

  • When a cardholder uses their credit card at a merchant, the merchant pays the credit card company a small percentage of the transaction amount. This is known as interchange and covers the cost of transaction and the cost to handle fraud.

 

  • Credit card companies charge interest on balances that are not fully paid off at the end of the billing cycle.

 

The major costs of credit cards are service costs and charge offs.
 

  • Service costs include the costs to keep the credit card active and the costs to provide support to the cardholder

 

  • Charge offs occur when a cardholder can no longer pay their credit card debt and the credit card company fails to recover the amount of money the cardholder has borrowed on the credit card

 

Checking and savings accounts are simpler to understand. The bank makes money by lending a portion of the money that customers have deposited into their accounts. They give customers a small amount of interest for their deposits.

 

The interest rates that banks charge for loans are much higher than the interest rates that the bank pays to customers for their deposits, which is how banks make money.

 

How to Solve a Capital One Case Interview

 

There are six steps to solving a Capital One case interview:

  • Take notes on the case background information

 

  • Synthesize the information and verify the objective of the case

 

  • Ask clarifying questions

 

  • Create a framework

 

  • Perform calculations

 

  • Discuss the implications of your answer

 

  • Deliver a recommendation

 

1. Take notes on the case background information

 

Capital One case interviews begin with the interviewer giving you the case background information. Let’s say that the interviewer reads you the following information:

 

Interviewer: As an investment, your friend is considering opening up a mini-golf course. Should they do it?

 

As the interviewer reads you the case information, take notes. It is important to understand what the objective is.

 

2. Synthesize information and verify the objective of the case

 

After the interviewer finishes giving you the case information, confirm that you understand the situation and objective. Provide a concise synthesis like the following:

 

You: To make sure I understand correctly, our friend is considering opening up a mini-golf course as an investment. The goal of this case is to decide whether they should open up a mini-golf course.

 

Interviewer: Exactly. That is correct.

 

3. Ask clarifying questions

 

Next, you’ll be able to ask clarifying questions. Try to limit your questions to only the most critical questions that you need answers to in order to solve the case.

 

You: Before I begin structuring a framework, can I ask what our friend’s financial targets are for the investment?

 

Interviewer: Your friend is hoping to make at least $200,000 in profit in the first year.

 

4. Create a framework

 

Next, lay out a framework for how you are going to solve the case. A framework is simply a tool that helps you structure and break down complex problems into simpler, smaller components.

 

For this Capital One case interview example, your framework may look like the following:


Capital One Case Interview Framework

 

You: To determine whether or not our friend should open a mini-golf course, we will need to calculate the expected annual profit. To do this, we need to calculate expected revenues and expected costs.

 

To calculate revenues, we need to estimate how many people will visit the mini-golf course per year. 

 

We can calculate this by estimating the number of people that come per hour and multiply this by the number of hours per day the mini-golf course is open. To annualize this, we can multiply by the number of days per year the course is open

 

If we know the number of annual visitors, we can multiply by the price that the mini-golf course charges for admission to get total annual revenue.

 

To calculate costs, we need to add up all of the different costs associated with running a mini-golf course. The major costs that come to mind are construction costs, rent, and staff costs to operate the mini-golf course. There are also other minor costs such as the costs of golf balls and golf clubs.

 

Interviewer: That approach makes sense to me.

 

5. Perform calculations

 

Once you have presented your framework to the interviewer and the interviewer has approved of your approach or given you feedback, you will move onto doing calculations.

 

When you are performing calculations, make sure you are walking the interviewer through each step. You do not want to be doing calculations in silence.

 

By walking the interviewer through each step of your math, the interviewer can easily follow what you are doing and provide suggestions or further information to help you.

 

Interviewer: Let’s move onto the calculations. I have the following information for you.


Capital One Case Interview Example


You: Let’s calculate revenue first. The mini-golf course is open 12 hours per day.

 

From 10AM – 5PM, the mini-golf course gets 10 visitors per hour. This gives us 70 visitors over seven hours. From 5PM – 10PM, the course gets 50 visitors per hour. This gives us 250 visitors over five hours. So, the mini-golf course gets 320 visitors per day.

 

The course is open 360 days per year, so 360 days times 320 visitors gives us 115,200 visitors. If each visitor pays $15 for admission, that is $1,728,000 in revenue per year.

 

Looking at costs, rent is $24,000 per month or $288,000 per year. 

 

There are 12 staff members at all times. They work 12 hours per day at $12 per hour. This gives us $1,728 in staff costs per day. Multiplying this by 360 days, this gives us $622,080 in staff costs per year.

 

Adding construction costs, equipment costs, rent costs, and staff costs gives us a total cost in the first year of $1,525,080.

 

Therefore, profit in the first year is $1,728,000 minus $1,525,080, which is $202,920. 

 

6. Discuss the implications of your answer

 

When you have finished your calculations, discuss the implications of your answer. How do the results of your calculations help you answer the overall case question? What are other considerations you should take into account?

 

Interviewer: How would you interpret your answer?

 

You: Since profit in the first year is $202,920, this just meets our friend’s financial objective of reaching $200,000 in profits in the first year.

 

However, I noticed that construction costs and equipment costs are a one-time fixed cost. Although there will probably be future maintenance costs, our friend would not incur $615,000 of these costs again in the following years. I’d expect profits in year two and beyond to be much larger than the first year.

 

I also noticed that the mini-golf course employs 12 people at all times. Is there a reason for this? I’m wondering if there are opportunities to use machines to replace some of the repetitive and manual tasks that these employees do. This may further increase profits by decreasing costs.

 

7. Deliver a recommendation

 

At the end of the Capital One case interview, the interviewer will prompt you for a recommendation. Make sure to structure your recommendation so that it is clear and easy to follow. You can use this simple, but effective structure:

  • State your recommendation

 

  • Provide 2 – 3 reasons that support your recommendation

 

  • Propose next steps

 

Here is an example of what a recommendation could look like:

 

Interviewer: Thanks for all of the work that you have done so far. What is your final recommendation?

 

You: I recommend that our friend should open up a mini-golf course. There are two reasons that support this.

 

One, the mini-golf course is expected to generate $202,920 in profits in the first year. This meets our friend’s financial objective of having at least $200,000 in profits in the first year.

 

Two, profits in year two and beyond will be much higher because our friend will not incur another $500,000 in construction costs or $115,000 in equipment costs. There will still be maintenance and repair costs, but profits could be as high as $817,920.

 

For next steps, I’d want to determine if our friend has the capabilities to successfully run and operate a mini-golf course. I’d also want to look at competitors to see how strong they are. They may try to take away visitors and revenues from our friend’s golf course.

 

Interviewer: Thanks for the recommendation. This concludes the case interview.

 

Capital One Case interview Tips

 

Follow the five tips below to avoid making common mistakes in Capital One case interviews.

 

Tip #1: Share your thinking and reasoning out loud

 

Many candidates make the mistake of not communicating what they are thinking or doing. Remember, you get no credit for great ideas if they are not communicated to the interviewer.

 

When creating a framework for the case interview, walk your interviewer through it. When performing math calculations, walk your interviewer through each step.

 

For each decision that you make, communicate why you are making that decision so that the interviewer can understand the approach and rationale that you are using.

 

This way, the interviewer can give you credit for your ideas and thinking. Additionally, the interviewer may offer you suggestions or guidance to help you solve the case. The interviewer cannot provide you with support if they do not know what you are thinking or planning to do.

 

Tip #2: There is not always one correct answer

 

Like most case interviews, there is not always one correct answer. For the same Capital One case interview, two candidates can give completely opposite recommendations and still both receive job offers.

 

Although math calculations typically only have one right answer, there are many ways to interpret the final figure that you have calculated. As long as your recommendation is supported by data and evidence, your recommendation will be accepted by the interviewer.

 

Tip #3: Stay organized when working with a lot of data

 

Capital One case interviews will have a lot of data and information in the form of tables, charts, and graphs. When working with a lot of data, it is important to stay organized.

 

Make sure you do your calculations on a separate sheet of paper to keep your calculations separate from your notes and framework.

 

As you calculate different numbers, circle important numbers that you are likely to use over and over again. This makes your numbers easier to find and will prevent you from having to recalculate a figure that you have already calculated.

 

Draw a box around your final calculated answer to distinguish it from your other numbers and calculations.

 

Tip #4: Check your units

 

Make sure to check the units of the data you are working with.

 

Capital One case interviews often include data that have different units. For example, revenue may be given in terms of revenue per week while costs may be given in terms of costs per month.

 

Whenever you perform calculations, make sure the numbers are in the appropriate units. Working with the wrong units will make your answer wrong by orders of magnitude.

 

Tip #5: Know how to use a calculator quickly and efficiently


Capital One case interviews are one of the few interviews where you are allowed to use a calculator. You will most likely need to use the calculator during the interview when you are given large numbers that are tedious to calculate by hand.

 

Capital One is strict on only allowing standard, non-scientific calculators. Therefore, become familiar with using this type of calculator, which can only perform basic addition, subtraction, multiplication, and division.

 

These calculators have much less functionality than scientific calculators, so it may take some practice to get used to using them.


Capital One Case Interview Example


Capital One provides a video explaining their case interview process. They also provide examples candidates answering case interview questions. The video is embedded below:


 

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