Bank POV: An Interview with U.S. Bank CIO Dominic Venturo

At the Plug and Play Retail and FinTech Expo on October 22nd, I had the opportunity to interview Dominic Venturo, CIO of U.S. Bank, on his views of the future of fintech and the role of the traditional bank in the new age cloud and increasingly mobile-first landscape. While its invigorating to cover the fintech newcos, they hardly have the monopoly on innovation. And, in the words of the legendary and enduring Grandmaster Flash, “You have to know where you came from to understand where you are going.” Partnering with the banking establishment can provide insight (and resources) that may save newcos time and iterations later.
Why choose to spotlight U.S. Bank? First, it has what Venturo calls a “wide lens” or breadth of business in that it runs a large payments business, is both an issuer and an acquirer, and also has a large retail bank. But mostly I find the U.S.’s fifth largest commercial bank interesting in that it makes innovation a core component of its culture. Aside from the sending of a C-level executive to speak at an accelerator/incubator micro-conference despite not having a venture wing, the company strives to support and to work with innovative partners including start-ups. States Andy Cecere, chief operating officer for U.S. Bancorp, “Innovation is part of our culture and it is how we view the development of new products and services. By anticipating what our customers will want or need in the future, we can better prepare our customers and company for whatever is ahead, capturing opportunities and avoiding pitfalls along the way.” Recent examples of innovation from U.S. Bank include advances in mobile payments, voice biometrics, tokenization and integrated mobile and web commerce solutions.
But what I really like about U.S. Bank is that it is willing to be a banking industry contrarian — and successfully so. One notable example is that while the majority of banks have cut back on small business lending (sub $1 million) over the past few years, U.S. Bank has increased its commitment to SMBs. In its fiscal year ended September 30th, the bank stepped up the overall dollar value of its SMB lending by 15.4% over 2014, while spreading its lending over an 18% greater number of loan recipients. The bank lent $776 million via 3977 loans in its fiscal year 2015 — a modest size loan average of $195,122 per business. Yet U.S. Bank reported an overall full year record performance in 2014 with net income of $5.85 billion.
But back to my interview with Dominic Venturo. Pardon the video quality — impromptu interviews necessitate the occasional shaky frame whilst one adjusts her grip on the cell phone… Thankfully the post-production team has added a little more pizzazz by posting each of my questions on-screen prior to Dominic’s answer.

Some interesting takeaways:

  • It’s not so much the cloud now, it’s mobile.
  • He sees the greatest fintech innovation happening in the minutiae of the payment life cycle — making in-app payments seamless, simplifying mobile payments.
  • Passwords are going away for both internal use as well as consumer multi-factor authentication, with mobile phone-based biometrics being an area that U.S. Bank is focused on.
  • Hardward tokens are not necessarily making a full-out comeback (for authentication) but there is a marked increase in their use — U.S. Bank uses them internally.

 

Slack Posts New Functionality

Slack is widely acknowledged as the enterprise real-time messaging (work chat) tool with the most traction, having passed the million daily user mark in June. It seems that the company is not content to stay boxed into the work chat category, however. Yesterday, Slack announced and released Posts 2.0, a feature that enables the rich authoring of blog posts and publishing them to targeted collections of people.
Since its launch, Slack has had this feature, called Posts, that lets people write content that far exceeds the length of a normal chat message. However, it was so clunky that few people used it, if they were aware of it at all. To create a Post, one was sent out of the Slack application to a web browser, where text was written using a very simple editor and then saved back to Slack as an entry in the conversation stream of a specific channel or group.
The new Posts 2.0 includes an inline text editor, which improves the experience in two ways. First, it keeps users inside the Slack app. Second, it lets them create rich text with formatting styles like headlines, bulleted lists and checkboxes. Beyond that, the new editor also acts on embedded URLs by automatically displaying graphics, showing previews of websites and expanding tweets.
Once written, Posts can still be shared with specific individuals, channels and groups, whose members can comment directly on the entry (as opposed to creating an chronologically-ordered entry in the Slack conversation stream). This is one of two places in Slack where properly threaded discussions are possible; Files is the other.
There is another important new feature in Posts 2.0 – the ability to save and access Posts in the Files section of the Slack application. So rather than having to scroll through or search the Slack conversation stream to view a specific Post again, it can be easily found in the Files repository. Additionally, if an author stars a Post in the editor or a reader does so in the conversation stream, it will show up in Slack’s Starred Items list. 

Cool, But Do Businesses Need This? 

With Posts 2.0, Slack has complemented existing features with new ones that, in combination, begin to move the application beyond being primarily a work chat tool. Slack has now effectively become a lightweight Web Content Management System that enables blogging (to a targeted audience), file storage and sharing and threaded discussion (around Posts and documents stored in Files only). It’s a lightweight people directory with profiles too. Oh, and it’s still a communication and collaboration tool.
This expansion of mission is fine, but it immediately raises the question that I previously asked and continue to pose about Slack. Why? Do work teams really need an alternative to existing corporate communication and information management applications that already satisfy the same use cases that Slack is addressing? How is Slack better than the status update, IM, blogging, file sharing, and discussion tools for communities (groups) that are bundled in the enterprise social software applications and platforms that organizations have already licensed and deployed?
In addition to the functional redundancy, one also wonders if Slack will ultimately lose its audience by becoming the opposite of what it was originally. The application’s strong initial appeal was the simplicity of its user experience. By adding more communication and collaboration features, Slack risks becoming a complex mess of functionality that few will care to use, especially on mobile devices.
On the other hand, Slack may intentionally de-emphasize its application in the future, positioning and going to market as a platform on which developers can create their own apps. We’ll see. Many already refer to Slack as a messaging-centric platform. Time will tell if that is indeed their market strategy for the long-haul, but, for now, Slack is beginning to look like yet another bloated application.

Your baby sucks. And this startup wants to tell you how much

Brainchild Technologies wants to build a pacifier that measures the frequency of your infant’s suck reflex, with the idea that giving parents this information via an app can help them measure their child’s brain development. Neurologists have shown a link between how often a baby sucks and how engaged it is with a person or activity, and so Brainchild wants to take this research and apply it to a wearable for the newborn market.

The startup is one of six that will show off its technology at an investor demo day for the NeuroLaunch accelerator in Atlanta on Feb. 3, in what might be the first accelerator devoted to startups working in the neurosciences. Anish Joseph, who is one of NeuroLaunch’s co-founders, explained that the accelerator came about when he and a fellow biomedical engineer made a list of available neurological resources located in the Georgia Tech campus. When he brought them to a mentor who was trying to understand what was available to him from a neurosciences perspective, his mentor was amazed; he hadn’t heard of half of them.

From there, Joseph and his co-founders took that list and added other local resources outside of Georgia Tech, after which they applied for a grant to create a program that would try to get all of the different neuro-related researchers talking. From there they came up with the idea to help startups take advantage of the wealth of programs and scientists in the area. They received the funding and created their first class of NeuroLaunch, which came to Atlanta in November of last year.

The point of the accelerator is to bring a variety of different perspectives together, because when it comes to the brain, there are many different disciplines, but they remain rather far apart. On one side are psychologist and psychiatrists while on the other are neurologists or biochemists. There are a lot of duplicate efforts and not a lot of crosstalk, but Joseph would like that to change. In an email follow up to our conversation he wrote:

[blockquote person=”” attribution=””]”The truth is perception is not always reality especially when it comes to the mind and context does matter. Information in the world definitely exists in silos and it seems to me like we’re approaching a period where for the first time we’re sharing experience instantaneously around the world if we choose to do so. I think neuro-entrepneuriship in particular is very interesting because from my experience most people who end up in this arena aren’t just worried about making money but also want to make a real positive impact in the world because what drives them most of the time is some sort of personal experience that they want to understand and fix for other people.”
[/blockquote]

To that end NeuroLaunch has brought these six companies together for three months and has created a program with over 90 mentors and provided them with a range of funding from $20,000 to $100,000 depending on the startup. Joseph didn’t share the equity given up for the funds, although in the original application the idea was that startups would get $20,000 in exchange for 7 percent of their equity.

Here are the other companies in this group:

Cognition Medical: The FDA will have to approve the device this company is building, but if it succeeds, victims of a stroke may have a better chance of recovery. The product will be inserted into the blood vessels of the brain and will allow oxygenated blood to flow back into the brain after a stroke in a more gradual manner to reduce the shock experienced by brain cells when oxygen returns too quickly.

Intellimedix: The company is trying to build algorithms that weighs how a person’s specific genetic makeup might interact with the existing chemical compounds in existing and pre-approved drugs to help discover new cures for diseases.

Mint Labs: This Spanish company wants to improve brain imaging and analytics and host such imaging in the cloud so everyone can have access to it.

NeuroCruitment: Finding patients for clinical trials can be a pain, but this company tries to use math to get better candidates within certain patient populations. It also finds them on social media lowering costs and finding people more quickly.

Safe Heart: Like Brainchild, Safe Heart is making hardware, but in this case it is a blood pressure cuff, a pulse oximeter and app that doesn’t contain any batteries. The hardware draws power from your phone. The goal of the device and app is to encourage people to take their vitals and send the information to their doctors so most of the startup’s work is on gamification.

Y Combinator analyzed its data to figure out whether it’s discriminating

Y Combinator, Silicon Valley’s most popular business accelerator program for startups, released data to show it’s not discriminating against women, Hispanic and black founders when choosing what to fund.

It sampled 5 percent of its Winter 2015 applicants to find out their gender and ethnicity. It then compared the demographic statistics to the percentage of companies it funds.

YC found that it funds a comparable percentage of diverse companies to the applications it receives. The numbers aren’t 100 percent bulletproof, of course, since YC didn’t disclose how it drew its random 5 percent sample to represent its application demographics.

However, the accelerator should be commended for making the effort to check its funding tendencies at all and share the data publicly. Almost all of Silicon Valley’s big tech companies have diversity problems, which we compared using visualizations in August.

Here’s the numbers from YC’s blog:

11.8% of the founders who applied were women and around 3% percent of the founders were either Black or Hispanic.

Of the founders we funded in our most recent batch, 11.1% of the founders are women (about 23% of the startups have one or more female founders), 3.7% of the founders are Hispanic, and 4% of the founders are Black.

The accelerator acknowledged that although it doesn’t appear to discriminate in its funding choices, it’s problematic that so few female, black and hispanic founders apply to YC.  “We will continue and strengthen our outreach efforts,” YC partner Michael Seibel said in the post.

Reddit CEO resigns and is replaced temporarily by Ellen Pao

Reddit’s CEO for the past three years, Yishan Wong, is out according to a new post by Y-Combinator head Sam Altman. Altman claims the resignation is the result of a dispute between Wong and the board about new office property and the budget for it.