This week, Capital One announced the acquisition of money management app Level Money. Seeing that the app had just 700,000 users at the time of the acquisition, why would Level Money be on the radar of an enormous company like Capital One? The answer is Simple (pun intended), a new online-only bank that combines great service with easy-to-use financial tracking and budgeting tools and apps.
Forced to compete with a new breed of tech-savvy, app-centric startups, Capital One is one of many companies across traditional industries that’s looking to reinvent itself as a software business. It’s no longer optional; digital transformation has become a matter of survival.
Digitization Makes Every Company a Software Business
With the rise in digital devices, consumers have grown accustomed to simple, intuitive apps that collectively manage all facets of their lives. Banking is a prime example. Just a few years ago, you were lucky if you could access your account balance online. Now, consumers have online self-service access to a variety of transactions, services and tools.
Banks are now scrambling to bring these same capabilities to mobile devices so that they’re accessible 24x7x365 from any channel or device. Services like mobile check deposit—once novel—are now table stakes for any provider looking to engage today’s consumers. This is forcing banks to continuously bring new services and apps to market to compete not only with each other but with disruptive startups.
In the Race to Digitization, How Can You Build More Apps Quickly?
The digitization of everything is forcing companies across industries—particularly traditional sectors like banking, insurance and logistics—to think and act like software companies. For most organizations undergoing digital transformation projects, though, there aren’t always apps out there to acquire. This puts enormous pressure on IT to build more apps for the business, and to do so faster than ever while adapting to constantly changing business and market needs.
The challenge is that due to the complexity and long development cycles associated with traditional programming methods, most IT teams are struggling to deliver what the business needs. According to our recent research, 71 percent of companies aren’t equipped to handle app delivery demands, meaning business demand exceeds IT capacity.
Create Differentiating Services with Rapid Application Development
Fortunately, another option exists: rapid application development in the cloud. The main benefit of cloud platforms for rapid developers is that they’re capable of slashing project timelines from years or months to weeks or even days. This time to market advantage is crucial for organizations looking to innovate and compete with apps, but have found traditional development methods insufficient for meeting rising business demands.
I’m sure enterprises like Capital One will continue to buy app companies like Level Money, particularly if there’s a large, active user base. But at the same time, organizations should consider adding rapid application development capabilities to the mix. This is especially important for those ideas that make the business unique or impact the next competitive advantage.
In the end, those businesses who leverage rapid application development will be in the best position to quickly deliver the apps needed to create new business models, engage customers and differentiate themselves in this new app world.