News

We are investing in the future of fintech and accelerating our dedicated fintech engagement team.

A new startup company is created every six seconds.

That sheer volume is just one of the reasons U.S. Bank has a dedicated fintech engagement unit, which analyzes the industry to find, evaluate and facilitate partnerships with the right emerging companies to work with us as we build upon the already strong digital and mobile experiences we provide our customers. Formed five years ago, the unit has quietly built into a leading practice, fostering relationships with fintechs that help us innovate, challenge the status quo and think big about what’s possible.

And now, U.S. Bank has taken steps to accelerate it even further, becoming a limited partner in two venture capital (VC) firms specializing in the fintech space: Fin Venture Capital and Commerce Ventures. These VC firms invest in startups within the fintech ecosystem that work alongside banks. Our investments will allow us to leverage the knowledge and resources of these top tier firms.

“We’re active in all areas within fintech,” said David Ness, who leads the fintech engagement group at U.S. Bank. “Through development, investments, partnerships and more – relationships like these are vital as we grow relationships and make strategic decisions.”

The investments signal a maturation of the work U.S. Bank’s fintech engagement team has been doing to help the bank’s business lines engage and partner with fintechs to create solutions to business needs. While we often build capabilities in-house, at times it’s simpler and more economical to integrate specific components from a fintech into our tools than to develop from scratch, such as with our recent acquisition of Bento Technologies.

Over the years, Ness’s team has worked to facilitate fintech partnerships with U.S. Bank business lines in a number of emerging areas, including cryptocurrency, distributed ledger technology, tokenization of assets, digitization of credit applications, fraud detection, blockchain in foreign exchange conversion, personalized financial insights, API integrations and many more – leading to announcements such as these with Securrency, Lumint and Akoya. They’ve also looked at startups that allow us to display information on the glass windows of our branches, build out visual maps showing everything from transaction volume to average rainfall – and visualize how data mixes it together, and use AI to show us data patterns that humans can’t see.

In narrowing the potential candidates from thousands reviewed, to hundreds considered, to a few key partnerships, Ness explains it as a three-tiered process:

• Discover: Find fintech companies that may be a good fit for the bank strategically.
• Curate: Evaluate companies against the market, ensuring the optimal partner is selected.
• Engage: Facilitate onboarding and execution after a company is selected.

Through it all, Ness says that fintechs appreciate U.S. Bank’s decision-making process. Within the bank, the team has a trusted, repeatable process built on strong relationships and data that internal partners appreciate. Externally, we value the time and resources of potential partners as we typically make a decision on moving forward in less than two weeks.

“That level of transparency is something you don’t usually see,” Ness said.

The VC firms have a deep understanding of the fintech space and can deliver tailored research and insights into emerging trends and the bank’s specific areas of interest. We’re also able to utilize the VCs’ networks for future partnership and/or investment opportunities. The firms get a partner that can help build and scale their companies, and it gives them the chance to help our customers with their innovative solutions, all while we provide feedback into new and emerging spaces – giving them a boots-on-the-ground sounding board.

This year in particular, Ness said he’s had more conversations around fintech partnerships than ever before. We are an attractive partner in terms of our size and position.

“We leverage an extensive network of partners to source options, based on a series of relationships we’ve built over the years,” Ness said. “These two investments enhance that even further. It’s about stronger relationships with these innovative companies, deeper access into their focus areas, and earlier engagement in their strategic discussions, thinking and decisions – all of which enable us to create the best possible solutions for our customers faster and more efficiently.”