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The creation of Capital One Wallet is an example of how a large financial services IT organization can move like a startup and think like a design firm, transforming business expectations in the process. Their work earned them the No. 1 spot in the 2016 InformationWeek Elite 100.
When you think "tech startup," a financial institution that's nearly 30 years old and employs 40,000 people is hardly what springs to mind. Yet a startup culture is exactly what Capital One Financial is cultivating in its approach to tech advances such as the Capital One Wallet mobile app.
That's only one way the financial institution is breaking the mold in its industry. Capital One Financial has also embraced Design Thinking, a groundbreaking approach for developing goods and services. The company sends executives to Stanford University's Hasso Plattner Institute of Design for training, and then incorporates the methodology throughout the organization.
"Fundamentally, our products are customers' experiences that are principally distributed through software," said Rob Alexander, CIO of Capital One Financial, in an interview with InformationWeek. Recognizing that helped the organization focus on building software that could leverage the data and analytics about its customer relationships and -- most importantly -- place these skill sets right alongside marketing, customer relationship management, and brand-building as crucial elements in the company's strategy.
"With that understanding, we embarked on a shift from IT to technology," said Alexander. "Over the course of this transformation, we rebranded ourselves from the IT department to Capital One Technology."
A typical bank organization will largely procure third-party software for its internal and customer-facing operations, Alexander said. Capital One, on the other hand, is "an organization that truly builds its own software and develops its own solutions. That is a different DNA," he said.
Capital One Wallet can be seen as a microcosm of this transformation. "It reflects how we operate today, [which] is very different from how a typical bank operates," Alexander said.
To hear Alexander describe what that looks like at Capital One is an exercise in cognitive dissonance. You know you're talking to the CIO of a large financial institution, but the words he uses sound more like the eager story of a Silicon Valley startup:
All of these factors came to bear in the creation of Capital One Wallet. "We built Capital One Wallet entirely native, first for iOS, then Android," Alexander said. "We were first to have a wallet app with Android tap-to-pay incorporated into the app, and we did it all in under nine months."
Capital One Wallet is designed to help customers track spending. It flags potential fraudulent activity through real-time alerts sent when either a physical credit/debit card or Apple Pay or Android Pay is used. Customers can see a running list of their transactions, which -- unlike traditional banking apps -- instantly displays enhanced information, such as the true merchant identity, location, and contact information.
The app also gives customers the ability to instantly redeem rewards points for digital gift cards, apply them to past travel charged to their credit card, or use them to pay off a statement. It also included Apple Touch ID as part of the initial launch.
The app offers either Touch ID or SureSwipe, which uses a customized nine-dot pattern sign-in, rather than a standard user name and password. The Capital One Wallet uses a different identifier than the physical plastic credit/debit card, so there's no need to cancel the card if the phone is lost, and vice versa.
In addition to the iOS Capital One Wallet, the company released capabilities to integrate with the Apple Watch. Capital One Wallet for Android devices is also one of the first mobile tap-and-pay solutions in the US to use host card emulation, which is Android's equivalent of Apple Pay.
Collaboration among various stakeholders was a key element in the development of the Capital One Wallet -- and the company's ongoing design practices.
The project began with a series of design sessions intended to uncover the unarticulated needs of customers and define a problem that needed solving. Involved in the design sessions were associates from Capital One Technology and Digital, as well as business associates from the company's bank and credit card businesses.
Scott Totman, head engineer on the Capital One Wallet project, joined the company three and a half years ago. He was one of the professionals selected to attend classes at the Stanford University Institute of Design.
"What I learned coming out of it is that you're not asking the customer what the next feature is that they'd like to see," Totman said. "You're asking the customer to tell you a story about their relationship with financial services and money. You listen for pain points, purchasing points, and the customer,