​Long before Silicon Valley became enamored with financial-technology startups and the promise of using better data and algorithms to remake banking, Capital One FinancialCorp. COF -1.16% was already blazing that trail.
Now, the data breach affecting 106 million past, present and prospective customers threatens to upend its long-held reputation for digital prowess.
“While we didn’t use the term back then, we were an original fintech,” CEO Richard Fairbank said on an earnings conference call in April. “It is striking that our battle cry at the founding of our company was to build a tech company that does banking.”
That ethos prompted Capital One to leap into cloud computing about five years ago, making it one of the first big banks to migrate reams of customer and corporate data and applications off its own data centers and onto Amazon.com Inc. AMZN -1.73% ’s cloud services.

​That decision could prove to be a liability. The hacker accused of breaking into Capital One’s customer data, Paige Thompson, is a former employee of Amazon Web Services Inc., The Wall Street Journal has previously reported. She is accused of getting through a Capital One firewall to access data the bank had stored on the Amazon cloud service.
The hack is likely to put Capital One on the front line of concerns about what the trade off is for banks looking to emulate the practices of tech companies, which themselves have been criticized over their handling of consumer information. Many big banks are following Capital One’s lead to outsource more of their tech processes, but questions remain about whether new security gaps are being opened and how closely regulators should be able to watch.
Capital One said in a press release that the “vulnerability” the hacker exploited wasn’t specific to the cloud. The bank also said its cloud computing model helped it with diagnosing and fixing the problem.