ABA Banking Journal - September/October 2017 - 33

2

For some banks, this may involve a shift away from
viewing fintech companies as simply third-party vendors
or service providers, and instead as collaborators working
side by side to develop something new.
At U.S. Bank, for example, the bank's research and
development team has taken part in various fintech
accelerators, through which they work with early
stage fintech startups. "We're actually participating in
mentoring these companies and helping them frame
what they do so that they can have a partnership with
banks that will meet our security requirements or our
compliance requirements," explains Dominic Venturo,
U.S. Bank's EVP and chief innovation officer.

Innovation has become a strategic priority for U.S. Bank;
Venturo leads a dedicated research and development
team that is responsible for exploring new technologies,
trends and applied innovations. In just two years, Venturo
says he and his team of three employees (together with
partners across the organization) have looked at offerings
from around 700 fintech companies, resulting in about
30 products in pilot phase and three that have made it
successfully to commercialization.

2.Do something.

For bankers that are uncertain
about where to begin, "the next best thing to do is to
have some focus on doing anything. Do something," Venturo
advises. "You can study forever, but at the end of the day, if
you want to get anything done, you have to move from study
to do."
And size isn't an excuse to sit back and wait, Henrichs adds.
Rather, it's about choosing an area of focus that makes sense
for the bank in terms of available resources. While that may
not always be a big, sexy innovation, banks can start by
achieving smaller, incremental change-something as simple
as building and beta testing a new email delivery system can
help build up the bank's "try and fail muscle" and help lay the
groundwork for future, larger-scale projects.
"I would encourage a bit more of a bias for risk and action
to say 'let's stretch just a little bit,'" Venturo says. "If you're
doing a fitness routine and you do the same thing every day,
your body gets normalized to it and it doesn't actually get
any better. But if you stretch a little bit every day, it begins to
say 'I need to adapt to that.' You've got to start somewhere."

3

When approaching a new potential fintech player,
Venturo says, "we always look at: what is their objective,
what is management trying to accomplish and how
does it fit with our strategic goals and principles?" From
there, the bank makes a decision on whether to partner
or compete.

Innovation doesn't come without its fair share of risk,
however, which can hinder some banks from jumping
into a new partnership with both feet. "Institutionally, we
don't love to say 'it might not work and we'll have to go
back to the drawing board,'" says Henrichs. "That's why
it's important that it starts with the C-level." He adds that
part of the mindset shift is acknowledging that eliminating
all risk in innovation just isn't realistic. "It's not about
risk elimination. It's about putting a plan in place to both
monitor and respond when that thing we tried doesn't
work exactly as expected."

3.Be forward-looking.

Consumers' demands are
shifting every day, and new products will continue
to hit the market at an unrelenting pace. Knowing that,
bankers must be able to keep an eye on the horizon.
It doesn't take a crystal ball to make some educated guesses
about what the future holds, Venturo adds. "You can look at
things that are predictable trends"-such as societal shifts,
demographic changes, spending changes and others-to
piece together a forward looking view of what's ahead.
"Payment tokenization, digital identity and security, remote
authentication...are all going to become critically important"
in the days ahead, he notes.
While some trends will be foreseeable, bankers must still
leave room for-and be willing to embrace-uncertainty,
says Henrichs. "The most interesting problems to be solved
are the ones that are actually not as well characterized,
and that requires a shift in how we think about our product
development, our processes and our technology."
aba.com/BankingJournal | ABA BANKING JOURNAL

33


http://www.aba.com/BankingJournal

Table of Contents for the Digital Edition of ABA Banking Journal - September/October 2017

CHAIRMAN’S VIEW
UPFRONT
PICTURE THIS
LEGAL BRIEFS
POWER UP PROFILE
THE TOP FINTECH TRENDS DRIVING THE NEXT DECADE
PLUG AND PLAY: FOUR WAYS TO LEVEL UP YOUR MOBILE BANKING APP
MAKING FRIENDS WITH FINTECH
LOOKING AT FINTECH THROUGH THE LEGISLATIVE LENS
LET’S TALK PAYMENTS
IS OUTSOURCING IT SECURITY RIGHT FOR YOUR BANK?
THE CECL RIPPLE EFFECT
FROM YOUNG AMERICANS TO ENTREPRENEURIAL CITIZENS
FINDING THE PERFECT NICHE
THREE ELEMENTS OF BANK LEADERSHIP
REAL ESTATE LENDING
ABA COMPLIANCE CENTER INBOX
WEALTH MANAGEMENT
FROM THE STATES
CORPORATE SOCIAL RESPONSIBILITY
INDEX OF ADVERTISERS
FROM THE VAULT
ABA Banking Journal - September/October 2017 - Intro
ABA Banking Journal - September/October 2017 - bellyband1
ABA Banking Journal - September/October 2017 - bellyband2
ABA Banking Journal - September/October 2017 - cover1
ABA Banking Journal - September/October 2017 - cover2
ABA Banking Journal - September/October 2017 - 3
ABA Banking Journal - September/October 2017 - 4
ABA Banking Journal - September/October 2017 - 5
ABA Banking Journal - September/October 2017 - 6
ABA Banking Journal - September/October 2017 - 7
ABA Banking Journal - September/October 2017 - CHAIRMAN’S VIEW
ABA Banking Journal - September/October 2017 - 9
ABA Banking Journal - September/October 2017 - 10
ABA Banking Journal - September/October 2017 - UPFRONT
ABA Banking Journal - September/October 2017 - 12
ABA Banking Journal - September/October 2017 - 13
ABA Banking Journal - September/October 2017 - 14
ABA Banking Journal - September/October 2017 - 15
ABA Banking Journal - September/October 2017 - PICTURE THIS
ABA Banking Journal - September/October 2017 - 17
ABA Banking Journal - September/October 2017 - LEGAL BRIEFS
ABA Banking Journal - September/October 2017 - 19
ABA Banking Journal - September/October 2017 - POWER UP PROFILE
ABA Banking Journal - September/October 2017 - 21
ABA Banking Journal - September/October 2017 - THE TOP FINTECH TRENDS DRIVING THE NEXT DECADE
ABA Banking Journal - September/October 2017 - 23
ABA Banking Journal - September/October 2017 - 24
ABA Banking Journal - September/October 2017 - 25
ABA Banking Journal - September/October 2017 - 26
ABA Banking Journal - September/October 2017 - 27
ABA Banking Journal - September/October 2017 - PLUG AND PLAY: FOUR WAYS TO LEVEL UP YOUR MOBILE BANKING APP
ABA Banking Journal - September/October 2017 - 29
ABA Banking Journal - September/October 2017 - 30
ABA Banking Journal - September/October 2017 - 31
ABA Banking Journal - September/October 2017 - MAKING FRIENDS WITH FINTECH
ABA Banking Journal - September/October 2017 - 33
ABA Banking Journal - September/October 2017 - LOOKING AT FINTECH THROUGH THE LEGISLATIVE LENS
ABA Banking Journal - September/October 2017 - 35
ABA Banking Journal - September/October 2017 - LET’S TALK PAYMENTS
ABA Banking Journal - September/October 2017 - 37
ABA Banking Journal - September/October 2017 - 38
ABA Banking Journal - September/October 2017 - IS OUTSOURCING IT SECURITY RIGHT FOR YOUR BANK?
ABA Banking Journal - September/October 2017 - THE CECL RIPPLE EFFECT
ABA Banking Journal - September/October 2017 - 41
ABA Banking Journal - September/October 2017 - 42
ABA Banking Journal - September/October 2017 - FROM YOUNG AMERICANS TO ENTREPRENEURIAL CITIZENS
ABA Banking Journal - September/October 2017 - 44
ABA Banking Journal - September/October 2017 - 45
ABA Banking Journal - September/October 2017 - 46
ABA Banking Journal - September/October 2017 - FINDING THE PERFECT NICHE
ABA Banking Journal - September/October 2017 - 48
ABA Banking Journal - September/October 2017 - 49
ABA Banking Journal - September/October 2017 - 50
ABA Banking Journal - September/October 2017 - THREE ELEMENTS OF BANK LEADERSHIP
ABA Banking Journal - September/October 2017 - 52
ABA Banking Journal - September/October 2017 - 53
ABA Banking Journal - September/October 2017 - REAL ESTATE LENDING
ABA Banking Journal - September/October 2017 - 55
ABA Banking Journal - September/October 2017 - 56
ABA Banking Journal - September/October 2017 - 57
ABA Banking Journal - September/October 2017 - 58
ABA Banking Journal - September/October 2017 - 59
ABA Banking Journal - September/October 2017 - ABA COMPLIANCE CENTER INBOX
ABA Banking Journal - September/October 2017 - 61
ABA Banking Journal - September/October 2017 - WEALTH MANAGEMENT
ABA Banking Journal - September/October 2017 - FROM THE STATES
ABA Banking Journal - September/October 2017 - CORPORATE SOCIAL RESPONSIBILITY
ABA Banking Journal - September/October 2017 - INDEX OF ADVERTISERS
ABA Banking Journal - September/October 2017 - FROM THE VAULT
ABA Banking Journal - September/October 2017 - cover3
ABA Banking Journal - September/October 2017 - cover4
ABA Banking Journal - September/October 2017 - outsert1
ABA Banking Journal - September/October 2017 - outsert2
ABA Banking Journal - September/October 2017 - outsert3
ABA Banking Journal - September/October 2017 - outsert4
ABA Banking Journal - September/October 2017 - outsert5
ABA Banking Journal - September/October 2017 - outsert6
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